Middle East Business News Review – 23 October

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Today’s top business and economy news from the Middle East and North Africa:

Fujairah oil port to become fully operational by year end

The Abu-Dhabi – Fujairah pipeline, bypassing the Strait of Hormuz, is expected to be fully operational by the end of the year and will carry Abu Dhabi’s oil exports, the UAE’s oil minister told reporters on the sidelines of the World Economic Forum in Dubai.

The 370-km pipeline carries oil from the emirate of Abu Dhabi to a major oil storage and fuel bunkering hub on the east coast. The new terminal storage tanks are built to hold a capacity of one million barrels each.

Qatar emir begins historic Gaza visit

The Emir of Qatar Sheikh Hamad bin Khalifa al-Thani has arrived in the Gaza Strip on a historic trip which will see the inauguration of a $254-million Qatari investment project to rebuild the destructed and besieged coastal enclave.

The leader of the Gulf nation is the first Arab head of state to visit Gaza since the imposition of a widespread international boycott of the Palestinian territory.

The investment project seeks to build 1,000 homes for poor families in the devastated Khan Younis area in the south of the Strip.

Saudi to spend $400m on Makkah hajj projects

Saudi Arabia is to spend around US$400m on development projects at holy shrines on the outskirts of Makkah, the official Saudi News Agency reported.

The report said the investment projects would include linking the city of Mina with Jamarat in Al-Azizia, the expansion of the western parts of the holy site of Jamarat, the transfer of the camel and cattle slaughter houses to Al-Sharayea in Mina and improvements to the water circulation in Muzdalifah and Arafat.

Kuwait clears Gulf War Iraqi airline settlement

Kuwait’s government has given final approval to settlement with Iraq to end a standoff over Gulf-War-era debts and lift restrictions on Iraqi Airways flying to destinations in the West, Iraq’s government said on Tuesday.

The airline row was part of a broader dispute over billions of dollars in reparations dating back to Iraqi leader Saddam Hussein’s invasion of Kuwait in 1990-1991 when his forces seized aircraft and parts.

Iraq and Kuwait in March reached an agreement under which Iraq will pay Kuwait $300 million in cash and invest $200 million in a joint airline venture in return for Kuwait lifting legal actions against Iraqi Airways.

Iraqi cabinet approves $118bn draft budget for 2013

The Iraqi cabinet has approved a 2013 draft budget of 138 trillion Iraqi dinars ($118.6 billion) on Tuesday, and forwarded it to the parliament for final endorsement, the government’s media advisor said.

Iraq has the world’s fourth-largest oil reserves and depends on oil revenues to fund 95% of its national budget.

OPEC-member Iraq exported an average of 2.6 million barrels per day (bpd) in September, the highest total crude exports in decades, and aims to boost shipments to above 2.8 million bpd this month. It also aims to double its output over the next three years after decades of neglect of infrastructure due to war and economic sanctions.

Defiant Kurdistan starts international oil exports

Kurdistan has started selling oil independently in international markets after striking export deals with foreign oil majors last year, a Reuters report said on Tuesday.

Baghdad is yet to comment on the latest development, which analysts say will enrage the government as it is still locked in a battle with Exxon Mobil over its independent deal with Kurdistan last year to explore for oil in six Kurdish blocs. Iraqi Kurdistan has been vying for greater autonomy and resisting central government’s claims that it alone has the right to market Iraqi oil and gas products.

The Kurdistan Regional Government (KRG) officials involved Trafigura and Vitol, two of the world’s largest trading houses, in their trade, making it difficult for Baghdad to retaliate, as it depends on those firms for a proportion of its refined oil imports like gasoline and diesel. Iraqi central government would have to pay higher prices for its fuel if it decides to shop elsewhere.

Private oil firms exported 20m barrels – Iran

An Iranian official claimed on Tuesday Tehran has exported some 20 million barrels of oil in the last four months through private companies despite tightening sanctions on its energy sector.

Sanctions imposed by the EU and US are aimed at stopping Iran’s nuclear programme. The blanket ban applies to imports of Iranian oil by state-run and private firms. Iranian officials say private sellers have sidestepped those measures.

According to the semi-official Mehr news agency, Hassan Khosrojerdi, the head of Iran’s oil products exporters’ union, said on Tuesday Iran had sold more than 20 million barrels of crude oil through private companies in the past four months, equalling to around 170,000 barrels a day.

Oman Minister Says Need to Increase Oil Production to Sustain Growth

Oman needs to increase its oil production next year as part of efforts to bolster its economic growth and generate revenues to support the government budget, according to the country’s oil and gas minister Mohammed Al Rumhy.

Mr. Rumhy said Monday that he expects the country’s average oil production to rise to 930,000 barrels per day next year, from an average 915,000 b/d in 2012.

Egypt to offer $450m cement license in South Sinai

The Egyptian industry ministry has decided to offer a new cement plant license in South Sinai, with USD 450 million in projected investments, an executive at the ministry told Zawya.

“The ministry’s Industrial Development Authority (IDA) decided to develop South Sinai, where no cement plants exist, through offering this license,” said Eng. Ismail Nagdy, the head of IDA, adding that the government is seeking to lift Egypt’s cement production by 22 million tons per annum by 2015 from 50 million tons today. The plan is to increase production to 80 million tons per annum by 2020.

“The new plant will be built in Abu Zenima, which has all the raw materials needed for cement making, including clay, marble and power supply,” Nagdy said.

Masdar to develop solar project in Mauritania

Abu Dhabi’s clean energy company Masdar on Tuesday announced the development of a 15-megawatt solar power project in Nouakchott, the capital city of the Islamic Republic of Mauritania.

The plant will deliver 10% of electricity capacity in Mauritania, Masdar said in a statement.

The project is the first utility-scale solar power installation in the Islamic Republic of Mauritania, it added.

 

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