Middle East Business News Review – 3 September
Today’s top business news from the Middle East and North Africa:
A plan to integrate six Gulf countries as proposed by Saudi Arabia last year in response to Middle East turmoil needed more discussion, Gulf Arab foreign ministers said on late Sunday after they met in Jeddah.
The GCC countries, Saudi Arabia, Kuwait, Qatar, Bahrain, the UAE and Oman, in January ordered a committee to study the idea and it presented its proposals to the foreign ministers before Sunday’s meeting.
Iran suspended a Chinese contract to build a liquefied natural gas plant in the Gulf port of Asaluyeh “until further notice,” the Mehr news agency reported on Monday.
Tehran decided to halt the €2.6 billion ($3.3 billion) contract because the Chinese group involved was unable to finance the project, the state-run agency said.
Mehr news report said Iran LNG Co., an affiliate of the National Iranian Gas Export Co., signed the accord with Chinese counterparts in 2008. The facility, to be built in two phases over six years, was to produce 10.5 million metric tons a year of LNG and other products such as gas condensate, the report added.
Media reports on Monday suggested the Obama administration is taking a “range of steps short of war” that it hopes will forestall an Israeli attack on Iran, while forcing Tehran to take more seriously negotiations that are all but stalemated.
The move by US comes amid Israel openly beating war drums and threatening to strike Iran’s nuclear facilities in the coming months.
Already planned are naval exercises and new anti-missile systems in the Gulf, and a more forceful clamping down on Iranian oil revenue.
Jordan’s King Abdullah has blocked a hike in the price of the low-grade fuel used by the poor as the aid-dependent kingdom struggles to cope with refugees from neighbouring Syria.
The increase in fuel prices, which sparked several scattered street protests by the government’s tribal and Islamist opponents, was the second this year under IMF-guided measures to cut subsidies and ease budget strains.
Palace officials said on Monday the king had asked Prime Minister Fayez al-Tarawneh’s government to freeze the planned 10% rise in the price of lower-grade gasoline.
Libya is ready to export the first post-Gaddafi era shipment of fuel oil from Ras Lanuf, the country’s largest refinery, this week, a local shipping agent said on Monday. According to Al Omran Shipping Agencies and Maritime Services, the 45,000 tonne cargo is due to load on 5 September.
Ras Lanuf, which can process 220,000 barrels of oil per day (bpd), restarted last week after being shut down during the war that ousted Libya’s former leader Muammar Gaddafi.
Libyan traders said the plant accounts for well over half of the country’s refining capacity and exported around five cargoes of low-sulphur fuel oil a month before the war.
Qatar Airways announced on Monday that it is about to launch savings on flights to more than 100 destinations around the world.
It said its latest three-day global sale would start at midnight September 3-4 (local time in each market) and end at 23:59pm on September 6 (local time in each market).
It did not specify discounts but added in a statement that passengers would be offered flights across Europe, Middle East, Africa, Asia, Australia and the Americas “at very attractive fares”.
Nine international companies or groups plan to bid for a contract that could be worth as much as OMR60m (US$155m) to design and consult on the construction of Oman’s first major railway, a tender board official said on Monday.
“The companies have been asked to submit new bids to give the process more time. The new deadline is on October 5, for what we expect will be a contract worth between OMR45m and OMR60m rials,” the official told Reuters, declining to be named under briefing rules.
He identified bidders as a consortium comprising Denmark’s COWI, DBI and AECOM of the US; SYSTRA of France; US-based Parsons; Mott MacDonald of Britain; a consortium comprising Italy’s Italferr and Worsely Parsons of Australia; a China Railway company; France’s Egis Rail; the Pointec group; and a consortium of Korea Rail and the Hyundai group.
Jordan’s Social Security Corporation, which administers the pensions and social security insurance plans for the country’s public and private sectors, is close to a decision on whether to sell its 15.38% stake in the Jordanian Housing Bank for Trade and Finance, worth JOD 320 million, or USD 452 million, at the current market value, a senior official told Zawya.
Qatari and Kuwaiti investment banks are in the fray to acquire the stake, the official said. “SSC is checking the bids received from the Qatari and Kuwaiti banks, and will decide the outcome at a board meeting on September 18,” the official, who is a senior manager at SSC, said on condition of anonymity.
The Middle East will be an important growth area in coming years for investment banks, including Barclays, as local wealth funds put their oil dollars to work buying European assets, a senior executive at the British bank said.
“If you look globally, the upside is in emerging markets and the Middle East is a key component of that,” Makram Azar, global vice-chairman for investment banking at Barclays, told Reuters.
Oil steadied on Monday, despite Chinese data showing a deepening slowdown in the world’s biggest energy consumer, as investors focused on the possibility of more stimulus measures and other moves to try to revive economic growth.
China’s factories have been hit by slowing orders, two major surveys showed on Monday, suggesting the slowdown in the world’s No. 2 oil user could be worsening.
The figures prompted a new round of speculation that governments would act sooner rather than later to increase money market liquidity to encourage bank lending, a move that would almost certainly boost commodities and oil.