GULF

 

Sept  15 - 21 , 2003

 

1.INTERNATIONAL

2. INDUSTRY

3. FINANCE

4. POLICY

5. TRADE

6. GULF


IRAQ'S OIL EXPORT TO ASIA RISES

Iraq's crude export to refineries in Asia is on rise. Traders such as Japan's Mitsubishi Corp and China's Sinochem International Company may ship more than 200,000 barrels a day of Iraq's Basrah Light Crude worth $500 million to refineries in Asia in the last quarter of the year, industry reports confirm. Refiners in Japan, Taiwan and India appear ready to use Basrah Light regularly provided the Iraq's State Oil Marketing Company (SOMO) is ready to fulfil recent supply contracts.

 

 

"There is a possibility once exports are normalized, volumes to Japan or the Far East will increase," Yoshinobu Satomi, assistant general manager of the crude oil trading at Tokyo based Mitsubishi Corporation, which has a contract to buy Iraqi oil, was quoted by Bloomberg as saying. Japanese refiners and traders were not allowed to trade directly with Iraq after the 1991 Gulf War because of sanctions. Now they are reportedly renewing links with SOMO.

Sales of Basrah Light which competes against Arabian Light Crude have reportedly picked up because of the price factor. SOMO has been selling the Basrah Light for September at 60 cents a barrel less than the Saudi Aramco's Arabian Light Crude. Some refiners in Asia, including India's Hindustan Petroleum Corporation, Indian Oil Corporation, Reliance Industries Ltd and Bharat Petroleum Corporation, are already buying Basrah Light directly from SOMO. Japan's Itochu Corporation is among the traders that are buying Iraqi oil for resale to the Asian refiners.

Mitsubishi, Japan's largest trading company, recently sold Basrah Light cargoes for October loading to two refiners in Japan. Chinese trader Sinochem was reported to have sold as much as four million barrels of Iraqi oil to Taiwan's state-owned Chinese Petroleum Corporation for deliveries in October and November. Basrah Light was last sold to Taiwan in March, traders were quoted as saying by the industry press.

ARAB ECONOMIES 'MUST REFORM'

Arab countries urgently need to reform their institutions if they are to achieve sufficient growth to fight mounting unemployment, the International Monetary Fund (IMF) has warned. Over the past 20 years, economic growth in the Middle East and North Africa has lagged most international averages, and rapidly growing populations have resulted in ever greater numbers out of work.

This problem which is contributing to the region's political instability has become more critical since the security situation deteriorated after September 11, 2001. In a series of new reports, the IMF recommends that Arab governments liberalise their economies, improve the quality of government, reduce their dependence on oil revenues, and invest money in education. The bulk of the IMF's concerns are laid out in a chapter of its next World Economic Outlook, which was published especially on 11 September.

The chapter follows a series of discussion papers, in which the Fund has pored over the often neglected subject of the Middle East's economies. Traditionally, Arab economies generally highly restricted, reliant on energy exports and determinedly self-sufficient have evolved at a different pace either from developed countries or the developing world. Between 1980 and 2001, the Middle East and North Africa region grew at an annual average of 3.1%, compared with 3.4% for developing countries as a whole, and 6.4% for dynamic south-east Asia. A large part of this is down to oil, which did not bring in foreign money as quickly as the region's governments hoped, and which squeezed out other possibly more fruitful forms of industry.

DUBAL FOR RESOLVING EU TRADE ISSUES AT CANCUN

Creation of a duty-free aluminium market will stimulate global consumption patterns, and encourage the growth of the Gulf's aluminium industry, both upstream and downstream, according to Sheikh Hamdan bin Rashid Al Maktoum, Deputy Ruler of Dubai and UAE Minister of Finance and Industry. "It is not only about improving Dubal's access to key markets such as the EU," Sheikh Hamdan, who is also chairman of Dubai Aluminium Co. (Dubal), added. Sheikh Hamdan's statement comes in time for the latest round of WTO ministerial talks in Cancun, Mexico.

Dubal has been quite active in pressing for the need to remove tariffs on primary aluminium, particularly the 6 per cent duty imposed by the EU on imports of primary aluminium.It has called on the WTO to "respect the commitment of the Doha Ministerial Declaration and Agenda, in particular by abolishing duties on raw materials and primary products within the deadline of this round by the end of 2004."

 

 

SHARJAH FIRM IN $1.2B DEAL

A $1.2 billion contract was signed recently between the Offices of Sheikh Ahmed bin Mohammed Al Qassimi and ADZ Trading company for the purchase of crude oil and oil products from Russia.

The joint venture deal envisages intial yearly export of 150,000 to 300,000 tonnes of this crude to Europen countries. "This will eventually open way to the markets in the US and Mexico," said Omar A. Yousddouf, head of the petroleum division of the Offices of Sheikh Ahmed.

The contract is for five years. It was signed by Sheikh Ahmed bin Saqr Al Qassimi, vice chairman of the company and Corrado D. Corneo, second secretary and head of the economic department at the consulate of Latvia. Peter Zeman, honorary consul of Latvia in the Czech Republic was also present.

MINISTRY BANS IMPORT OF LIVE ANIMALS, FARM MATERIALS

The Ministry of Agriculture and Fisheries has imposed a ban on a range of imported agricultural materials and live animals, in a bid to prevent the spread of diseases in the country.Customs officers in Abu Dhabi have been notified of updated restrictions via a memorandum from the undersecretary of the ministry, Engineer Rashid Khalfan Al Shariqi.

It included the list of prohibited items, including various food products, certain live animals as well as some fertilisers, fodder, and veterinary medicines.Eng Al Shariqi explained that the import of live animals and animal products is subject to specific rules which vary according to the type of animal in question.

PALESTINIANS RALLY FOR DEFIANT ARAFAT

Palestinians have reacted angrily to the news that the Israeli Government has decided in principle to expel Palestinian leader Yasser Arafat from the West Bank. In a show of support, huge crowds gathered at the compound of his battered headquarters in the West Bank town of Ramallah, and there were similar scenes in the Gaza Strip where thousands took to the streets.

The Palestinian Prime Minister-designate, Ahmed Qurei, reacted to the news by announcing he was suspending his bid to form a new government, saying that Israel's decision threatened the stability of the entire region. The decision to expel Mr Arafat was announced after an Israeli security cabinet meeting to consider a response to suicide bombings that killed 15 people in Israel.

UN TO VOTE ON LIBYA SANCTIONS

The United Nations Security Council is expected to vote later on Friday to lift sanctions against Libya. France, which had earlier threatened to block the resolution, says it will now vote in favour of lifting sanctions. It comes after Libya agreed to increase compensations payments to relatives of those who died when a French airliner was bombed over Africa in 1989.

ARAB STATES TAKE NEW IRAQ ABOARD

Iraq's US-appointed caretaker government has formally joined the Arab League, filling the vacancy left by the fall of Saddam Hussein's regime. It was a "major political achievement for the Governing Council [GC]", said Foreign Minister Hoshyar Zebari after attending his first ministerial meeting in Cairo.

The League, which acts as a forum for states in the region, decided after a lengthy debate to allow the GC to represent Iraq for a period of one year. Mr Zebari stressed that the GC plans to hold free elections in the middle of 2004 in order to create a permanent government.

BUSH URGES UN ACTION ON IRAQ

US President George W Bush has called on members of the United Nations Security Council to act quickly and approve a new resolution on Iraq. Bush last week called on members to avoid past disputes about the war and "move forward". The US has called for a new resolution that would authorise a multinational force in Iraq. But France and Germany which opposed going to war want to give the UN a larger role in Iraq's future than Washington appears willing to allow.

MORE SHOTS AT UK IRAN EMBASSY

British Embassy officials have protested to the Iranian Government over a further shooting incident outside their embassy in the Iranian capital of Tehran. Three or four shots were fired from the street at the building last week, an embassy spokesman said. No bullet marks have been discovered on the building but the officials believe the embassy had been deliberately targeted.

 

 

IRAN PLANS TERROR FUND FREEZE

Iran has announced plans for legislation to let it freeze terrorist-linked assets in line with its United Nations responsibilities. If as expected the bill is ratified by parliament and by the hard-line Guardian Council, it will make Iran a member of the International Convention for the Suppression of the Financing of Terrorism, which was created in 1999 and came into force in 2002.

HAMAS LEADER ESCAPES ASSASSINATION ATTEMPT

An Israeli warplane narrowly failed to assassinate a Hamas leader but killed his son and a bodyguard in Gaza, a day after two Palestinian suicide bombers killed 15 people in Israel.The missile strike flattened the two-storey home of Mahmoud Al Zahar, co-founder of the group and one of its top political officials. Al Zahar, 58, was standing inside his house when the missile hit and was thrown by the force of the explosion, witnesses said. He sustained only light injuries to his head and back but his wife was seriously hurt, medics said.

MORE FOREIGN BANKS MAY OPEN BRANCHES

The UAE reversed a long standing policy and declared its readiness to allow the operation of more foreign banks on a reciprocal basis.The decision by the Central Bank came just a week before the meeting of the International Monetary Fund and the World Bank in Dubai and reflects the country's ongoing trend to tear down investment barriers and open up its economy.

DIB OFFERS UP TO 80PC ISLAMIC MORTGAGES

Dubai Islamic Bank (DIB) will offer Islamic mortgages of up to 80 per cent of the value of the property in the Matal Al Qamar residential project, the bank's first real estate project in Lebanon.The bank launched an exclusive exhibition recently in Dubai to showcase the project. The sales centre and exhibition was inaugurated by Dr Mohammed Khalfan bin Kharbash, UAE Minister of State for Finance and Industry and chairman of DIB in the presence of Humaid bin Nasser Al Owais, Minister for Water and Electricity.

EBB, FLOW OF TRADE UNIONS

The UAE's national labour union draft law has been in the pipeline for several years and is due to be approved by the cabinet in 2004.

DDF EYES DH1.25B IN SALES

Dubai Duty Free (DDF) eyes Dh1.25 billion in sales by the end of the current year, achieving a 18 per cent growth over its last years annual sales, said Colm McLoughlin, DDF managing director.

IRAQ TO BOOST EXPORTS TO 1M BPD BY OCTOBER

Iraq is planning to increase its oil export to one million barrels per day by October 2003 and hope to raise it further to its Opec share of 3 million barrels per day by end of March 2004.Thamir A. Al Ghadhban, chief executive at Iraq's Ministry of Oil, told that the restoration of oil pipelines and enough power for the refineries would help in getting the exports back to the original level soon. Currently, the oil exports of Iraq is at 900,000 bpd. With Al Amyr Terminal operational with 400,000 barrels per day of capacity, Iraq will soon be able to achieve the export level of one million bpd.

NO COMPROMISE

Iraq will not compromise its hydrocarbon resources to generate revenue for the country says Thamir A. Al Ghadhban, chief executive at the Oil Ministry of Iraq.In his address to the Middle East Petroleum and Gas Conference (MPGC-2003), he said Iraq knows the value of oil for its people and would not compromise on this front.

GULF CRUDES STEADY

The market for Middle East crude grades was steady in light trading recently as most buyers were not ready to start buying for their November requirements.November Oman was nominally quoted at MOG plus six to 12 cents per barrel, mostly steady. December Oman was notionally assessed at MOG plus seven to 13 cents.