SINGAPORE: Saudi Aramco will kick off term jet fuel negotiations with trading firms in mid-November, and is likely to seek higher prices despite a global slowdown, traders said yesterday. Aramco may ask for higher term prices compared with the current year’s supply contract, on expectations of falling jet fuel exports from the United Arab Emirates, they said. “The term talks will start next month and the Emirates will be exporting less jet fuel because of rising domestic demand,” said a Singapore trader. The number of passengers at Abu Dhabi airport rose a third from a year ago in the nine months to Sept. 30 to more than 6.67 million passengers. Aramco could eye on a premium of $3 a barrel to Middle East quotes on a free-on-board (FOB) basis for January to December 2009 supplies. At present, spot jet fuel supplies traded at $3.80 a barrel above the Middle East quotes, FOB. “But lots of the players would not want to pay those numbers because of fears of global demand slowdown,” the trader said. For 2008 supplies, Saudi Arabia’s term jet fuel exports were 1 million tons, the same volumes as last year. Aramco sold the cargoes for lifting from Yanbu near the Red Sea at $2.80 a barrel versus $2.40 in 2007, FOB. Reuters
MANAMA: Global IT companies are to select Bahrain as their regional headquarters for Middle East activities.An agreement to this effect has been signed by a Bahraini firm with the Government of Victoria in Australia at the GITEX Dubai 2008. Gulf Future Business (GFB), participating in « Bahrain Gallery », reached an agreement to attract Australian Information and Communication Technology (ICT) companies to use Bahrain as a gateway to the markets of the Middle East. GFB chief executive Ahmed Al Hujairi said that the agreement with the Government of Victoria is within company’s strategy to promote Bahrain as a regional centre for global companies. He said the incentives and encouragement given by Bahrain have already attracted a lot of international companies to the kingdom. « The diversity of pilot projects that are responsive to the requirements of the knowledge economy, makes it necessary to search for new sources for developing our national economy, » said Mr Al Hujairi. He stressed that the legislative structure and advanced infrastructure available in Bahrain helped companies compete in the markets of the Middle East. Victoria government representative Maria Papadopoulos said that the choice of Bahrain is not a coincidence, but is a logical result of a scientific study of the business centres in the Middle East. « Bahrain today enjoys a privileged place with the infrastructure, laws and legislation on investments and the establishment of offices of foreign companies, all positive elements to encourage investment, » she said. GFB held a series of similar meetings with companies and organisations which took part in the GITEX exhibition from other Arab countries such as Egypt, Lebanon, Jordan and international including the US, Singapore, Belgium and Malaysia GFB had earlier signed similar agreements with international companies such as Bay Base, Malaysia. soman@gdn.com.bh gulf-daily-news.com
QATAR Petroleum (QP) will be the platinum sponsor of the 7th session of Milipol Qatar International Internal State Security Exhibition which will be held at the Doha Exhibition Centre from November 17 to 19. The sponsorship deal of QR1mn was signed by Brigadier Nasser bin Fahad al-Thani, chairman of Milipol Qatar committee and Sultan Abdullah Ali al-Abdullah, deputy public relations manager at Qatar Petroleum. Brigadier Nasser said: “QP’s platinum sponsorship of the event shows its commitment to Qatar. Qatar under the wise leadership of HH the Emir, Sheikh Hamad bin Khalifa al-Thani is witnessing rapid overall development.” He said the registration process for the Milipol exhibition was still open. Milipol Qatar Committee has extended formal invitations to the Ministries of Interior in the GCC countries and some European, American and Asian countries. Al Abdullah said QP was privileged to support Milipol Qatar exhibition and happy to participate in such a national event. Abdullah Saud al-Kuwari, director of HSE Industrial Crisis Management at Qatar Petroleum said the Milipol exhibition had great importance at a time when Qatar was on a high growth trajectory. “Since our oil and gas industries are booming, we need the highest standards of security, safety and protection for our facilities. In this context Milipol exhibition is very important as it will provide the platform for the exhibition of latest security-related technologies and sophisticated safety devices,” he said. Lt Col Ahmed Abdullah Jamal, director (finance) at the Ministry of Interior and member of the Milipol Qatar said: “The Milipol exhibition has been organised in the framework of boosting security cooperation between ministries of interior in Qatar and France.” gulf-times.com
MUSCAT — French President Nicolas Sarkozy will visit Oman early next year. Though the date has not been fixed, he has written that he is looking forward to the visit, said Anne-Marie Idrac, French minister of state for foreign trade, here yesterday. “France wants to increase the level of trade and investment between our two countries under the umbrella of a very important and positive political relationship built under the leadership of our Pwresident, Nicolas Sarkozy,” she said. There are tremendous opportunities to enhance trade ties between France and Oman in various fields, she added. She was in Oman as part of her four-day Gulf tour which has already taken her to Saudi Arabia, Qatar and the United Arab Emirates. Speaking to Times of Oman, she said her visit to Oman had a three-fold objective, which include developing and increasing trade relationship, trying to attract investment from Oman to France and to discuss with Oman authorities about the free trade agreement between the Gulf countries and European Union. “Trade figures between Oman and France are about 300 million euros,” she said, adding: “We want it to increase because we are only the 11th supplier of Oman and your developing sectors are exactly what France is good at and we have excellent companies that correspond to precise needs and expectations. We hope the 30 companies that work in Oman will become many more.” Welcoming Omani investors to France, she said: “We think it is a good time to come and invest in France because the rules to invest have been profoundly renewed. Many tax administration and labour law regulations have been revolutionised in order to have a more liberalised economy. This will be friendly for investors.” Industry, real estate, finance and new technologies are sectors where Omanis can look at investing or building partnership, she informed. Talking about the free trade agreement that is being prepared between the Gulf countries and EU, she said, “We hope it will be in place by the end of the year. There are only a few subjects left to be negotiated. The agreement on free trade will strengthen ties between the two regions.” Terming her visit a success, she said, “I am very happy with this visit. The impression was very positive and constructive. I heard positive things about Franco- Oman relations and have also heard the encouraging responses regarding the role that France is playing to cope with the international financial crisis.” timesofoman.com
Abu Dhabi: A massive influx of counterfeit products is taking its toll on the established brands as the UAE government plans to reduce the impact of a Dh10 billion annual import of fake products into the country. The UAE Ministry of Economy (MoE) and the Brand Owners Protection Group for the GCC and Yemen (BPG) on Sunday signed a memorandum of understanding (MoU) to protect intellectual property rights and on initiatives against commercial fraud and counterfeiting in the UAE. Mohammad Ahmad Bin Abdul Aziz Al Shihhi, undersecretary of the MoE, told reporters that the MoU will « enhance our position to fight counterfeiting and piracy. » Al Shihhi said in 2006 the size of the parallel business in the UAE through counterfeited products was estimated at $2.7 billion (Dh10 billion), with clothing, software and hardware as its key components. According to industry estimates, counterfeiting is one of the most dominant forms of intellectual property rights violation and has evolved into a big threat, accounting for more than 10 per cent of the world trade. Estimates show that 35 per cent of software sold in the UAE is counterfeit. International estimates are higher at 38 per cent. Losses arising from the problem rose to $94 million (Dh345 million) in the UAE in 2007 – a 52 per cent increase on the previous year’s figure of $62 million, according to the annual survey conducted jointly by the Business Software Alliance (BSA) and global market research firm IDC. International companies are estimated to be losing more than $60 billion a year because of copyright violation and violation in China. « Nobody can eliminate it, we are trying to minimise it, » said Al Shihhi. Sunday’s MoU is part of a series of strategic initiatives of the MoE in this regard. Al Shihhi said the MoU aims to provide full legal and technical support to the ministry’s agencies and partners, especially to inspectors belonging to the judicial police. Under the terms of the MoU, the BPG will provide legal and technical training to MoE specialists, inspectors, employees, and officials of departments and law enforcement agencies. BPG service providers will also cooperate with the ministry in providing the necessary legal support for law enforcement officials, such as legal analysis and studies. It will promote a culture of IPR protection through visual, audio, and print campaigns; these would highlight the importance of IPR; its protection against abuse; and the negative effects of IPR crimes. Growing losses – In 2006, the size of the parallel business in the UAE through counterfeited products was estimated at $2.7 billion. – Clothing, software and hardware are the key counterfeited items in the UAE. – Counterfeiting accounts for more than 10 per cent of the world trade. International companies are estimated to be losing more than $60 billion a year because of copyrights violation, trademarks and patents in China. – Estimates show that 35 per cent of software sold in the UAE is counterfeit. International estimates are higher at 38 per cent. – Losses arising from counterfeited software rose to $94 million (Dh345 million) in the UAE in 2007 – a 52 per cent increase on the previous year’s figure of $62 million, according to the annual survey conducted jointly by the Business Software Alliance and market research firm IDC. By Himendra Mohan Kumar, Staff Reporter G=Gulfnews.com
Basel: Inflation in the UAE, which pegs its currency to the dollar, is stabilising and likely US interest rate hikes will lift the ailing greenback, the UAE central bank governor said on Sunday. Speaking to Reuters on the sidelines of the annual central bankers meeting in Basel, Sultan Bin Nasser Al Suwaidi said Gulf Arab oil producers are « very firm » concerning their dollar pegs and have no plans to revalue their currencies. Inflation in the UAE hit 11.1 per cent in 2007, its highest level in at least 20 years. Price rises are accelerating across the world’s biggest oil-exporting region, where economies are booming on a seven-fold rise in oil prices since 2002. While inflation is rising globally due to surging food and energy prices, Al-Suwaidi said inflation is steadying in his country now. « It is stabilising now. That’s good news, » he said ahead on the sidelines of the Bank for International Settlements meeting. The UAE does not release monthly inflation data. Inflation in top global oil exporter Saudi Arabia was 10.4 per cent in May, easing slightly from 10.5 percent a month earlier. The Gulf region is struggling to control soaring inflation as higher oil prices spur rapid economic growth and currency pegs to a globally weak dollar fuel import price inflation. However, Al Suwaidi said the dollar was likely to rise in the near term and there was no change in the region’s exchange rate policy. « We are firm on the peg, there’s no revaluation. We are very firm. We see that inflation is causing the United States to raise interest rates in the near future and that’s going to take the dollar up. So why do anything opposite to what is good for us? » As the dollar plunged to repeated record troughs against the euro and a basket of major currencies this year and last, investors began betting the UAE and Qatar may follow Kuwait’s lead to fight inflation. But reform bets have receded since April as Gulf rulers closed ranks, saying they had no plans to drop their pegs or revalue their currencies ahead of achieving a regional monetary union plan. Asked about oil prices, which hit record highs above $142 a barrel on Friday, Al Suwaidi said the high energy costs were a double-edged sword for the UAE. « Oil prices – we would like to see them lower … whatever the market can reduce them to. I know [it benefits the UAE] but it creates also other problems. » Oil prices – we would like to see them lower … whatever the market can reduce them to. I know [it benefits the UAE] but it creates also other problems. » Source: Reuters
Abu Dhabi: The UAE national pavilion at Zaragoza International Expo (Expo Zaragoza 2008) is gearing up to attract as many as eight million visitors, according to the event’s commissioner general Emilio Fernandez-Castano. Castano, who is visiting the UAE on invitation by the national media council, thanked the UAE for being one of the first countries to announce participation in Expo Zaragoza. « The Emiratis should hold their heads high as their wonderful pavilion is set to attract over eight million visitors during the exhibition, » he said. Expo Zaragoza 2008 will be held with the topic of « water and sustainable development ». The event is being placed in a meander of the River Ebro. Some 104 countries, including the UAE, will take part in the expo. « I am here to offer thanks to the government of the UAE for putting together a very impressive national pavilion at Expo Zaragoza. I am pleased that the UAE is taking part in this major event to showcase its efforts and achievements in water conservation, environment protection and alternative energy, » Castano said. Castano said UAE’s participation in the expo to demonstrate its pioneering experiment in renewable energy and green cities will be an eye opener for the rest of the world and also an opportunity to intensify economic and cultural cooperation between the UAE and Spain. Source: WAM
Dubai: Dubai Financial Market yesterday closed higher for a fifth trading day, adding 0.15 per cent to 5,720.51. Emaar Properties rose 0.87 per cent and Emirates NBD 0.43 per cent. Abu Dhabi’s benchmark, which crossed 5,000 points for the first time in more than two years on Sunday, slipped 0.09 per cent to 4,995.74 points, its first lower close in five trading days. National Bank of Abu Dhabi declined 1.42 per cent and Abu Dhabi Commercial Bank fell 1.32 per cent. Elsewhere in the Gulf, shares rose as regional companies reported first-quarter earnings growth. Saudi Kayan Petrochemical increased to its highest in almost two months after announcing results. Qatar Islamic Bank gained for a third day as the lender said first-quarter profit surged 69 per cent. Barwa Real Estate jumped to a record. Saudi Arabia’s Tadawul All Share Index added 1.2 per cent to 9,638.79, its highest close since March 12 while Qatar’s Doha Securities Market Index advanced 1.1 per cent. « Strong earnings have boosted sentiment which brought funds and retail investors back into the market, » said Bashar F. Eisa, an analyst at Dlala Brokerage & Investment Holding in Doha. Saudi Kayan gained 3.8 per cent to 27.5 riyals, its highest close since February 25. The company building the world’s biggest ethylene-glycol plant reported first-quarter profit of 95.6 million riyals ($25.5 million). Qatar Islamic Bank gained two per cent to 125 riyals, its highest close since May 2006. Barwa Real Estate jumped 8.8 per cent to 62.9 riyals. The Qatar-based property-services business said first-quarter net income surged 88 per cent to 332.8 million riyals. Oman’s Muscat Securities Market 30 Index increased 0.5 per cent while the Kuwait Stock Exchange Index declined less than 0.1 per cent and the Bahrain All Share Index dropped 0.3 per cent. Source: Bloomberg
Abu Dhabi: Abu Dhabi’s general index on Sunday crossed the 5,000 mark for the first time this year as bullish UAE markets added more than Dh17.4 billion to the market value of listed companies. The value of traded shares recovered substantially to Dh4.3 billion of which Dh2.6 billion was in Dubai. The Emirates Securities general index advanced 2.07 per cent to 6,180.13, raising the gains since the beginning of the year to 2.72 per cent. In Dubai, the benchmark index added 2.28 per cent to its value to close at 5,711.98 on relatively heavy trading on the leading shares, especially Dubai Financial Market (DFM), Amlak Finance, Tamweel, and Emaar Properties. Emaar rose 3.14 per cent to Dh11.50, followed by its financial arm, Amlak, which reported a better performance, rising almost seven per cent to Dh4.91. DFM’s shares shot up 5.65 per cent to Dh5.80. Only four companies, out of the 26 traded, ended the session in the red. The Abu Dhabi general index advanced 1.82 per cent to 5,000.07. The value of traded shares exceeded Dh1.69 billion, as the rally continued on the real estate, energy, and banking sectors. Banks recorded substantial gains, led by First Gulf Bank which recorded an impressive 5.29 per cent worth of gains to stand at Dh22.75, followed by Union National Bank which advanced five per cent to Dh8.80. Soiurce: Gulfn ews.com
The UAE’s electricity demand projections are staggering. Based on future development plans, the current installed capacity of energy will need to double by 2015. The amount of energy the UAE consumes is set to treble by 2020 – a reflection of a very energy-intensive lifestyle. Even as the energy-producing Middle East sells its wares in lucrative global markets, the UAE looks set to suffer from the resulting demand and price rise. The UAE has one of the highest per capita gas consumption rates in the world. Until recently, the assumption was that demand growth would be met by creating additional generation capacity, fed by limitless gas resources. Governments in the region acted in line, seeking to locate energy intensive industries such as aluminium smelting and sponsoring the building boom. However, a significant shift occurred in the past year. Although gas, the principal fuel for power generation and desalination, is abundant in the region, the assumption that it would flow as a cheap resource to underpin the UAE’s growth no longer makes sense. Abu Dhabi’s gas is increasingly used in the oil recovery process. Using this gas for electricity generation instead could cost millions of barrels of oil left unrecovered. Abu Dhabi’s untapped Shah Field gas resource can produce the equivalent of 50 per cent of current UAE consumption. However, this resource is earmarked for supporting the oil recovery process. Furthermore, the gas has a high content of sulphur which has to be removed at a cost nearly equivalent to the current wholesale price. Qatar has instituted a gas development moratorium until 2011 to preserve its valuable resources for future projects. It has invested in special plants that allow its gas to be marketed anywhere in the world, attracting world market prices. Iran has plenty of uncommitted resources, but is no longer willing to sell these at prices significantly below world market standards. Put simply, the gas rich nations of the region have the options to sell their gas in an attractive world market which has raised the benchmark for gas prices at home, particularly in the demanding UAE. No substitute Alternate fuels for power generation all have problems. Fuel oil and coal are dirtier, less efficient and so more expensive options. The cost of generating clean nuclear energy is up to twice as expensive than gas-generated electricity and is a long-term undertaking, with 10-year lead times common. At the right price – which we estimate to be in the order 100 per cent higher than current wholesale price – gas will be available. Unless governments continue to subsidise energy prices, consumers must get used to the idea of higher energy prices. It is quite possible that some energy intensive industries will suffer. A possible solution to the UAE’s fuel problem is a combination of demand management, efficiency and diversification. Price rises will eventually lead to demand elasticity. The UAE’s real estate developments need to be regulated by building codes which make cooling more efficient, and make solar generated electricity and water heating mandatory. Domestic waste water should be recycled to get more use out of costly desalination which consumes vast amounts of electricity. Such consistent use of efficiency measures and demand management could yield the equivalent of roughly 10 per cent of installed capacity over the next five years. To summarise, energy prices are likely to rise significantly from the current level. Demand elasticity should appear and consumers are likely to seek more efficient real estate offerings. The time of abundant cheap energy is over, even in the UAE. Reducing energy intensity has to be a long-term goal, but in the interim: « user pays ». – The writer is managing director, The National Investor. By Gundi Royle, Special to Gulf News
