Saudi Aramco Named ME’s Most Valuable B2B Brand

Saudi Aramco is the Middle East’s most valuable B2B brand, valued at US$46.8 billion, following world’s biggest IPO, according to latest report by Brand Finance on world’s 500 most valuable brands.

Amazon makes history as first brand in Brand Finance Global 500 ranking to exceed US$200 billion value mark and retains title of world’s most valuable brand for third consecutive year.

Etisalat most valuable B2C brand in Middle East, retaining title for 3rd year running, only telecom brand to maintain AAA rating in region.

ADNOC breaks US$10 billion mark and crowned Middle East’s fastest growing brand.

With a brand value of US$46.8 billion, Saudi Aramco is the most valuable among the 44 new entrants in the ranking. The publication of the Saudi Arabian oil and gas company’s financials at the time of the IPO allowed for its brand to be included in Brand Finance’s annual study for the first time. Placing 24th globally, Saudi Aramco also claims the title of the most valuable brand in the Middle East and Africa.

The IPO has proven to be successful for the brand as Saudi Aramco raised US$25.6 billion, making it the largest ever to date. Even after navigating through recent attacks on two of its oil processing sites, it is now the world’s most valuable listed company, comfortably ahead of tech titans Apple and Microsoft. Saudi Aramco is focused on leveraging its strength in upstream, while growing its downstream operations through acquisitions, both in Saudi Arabia and key global markets. The company must now focus on developing international perceptions of the brand in order to open it up further for partnerships and investment.

The IPO has proven to be successful for the brand as Saudi Aramco raised US$25.6 billion. Even after navigating through recent attacks on two of its oil processing sites, it is now the world’s most valuable listed company, comfortably ahead of tech titans Apple and Microsoft. Saudi Aramco is focused on leveraging its strength in upstream, while growing its downstream operations through acquisitions, both in Saudi Arabia and key global markets. The brand must now focus on developing international perceptions of the brand in order to open it up further for partnerships and investment.

While Saudi Aramco is the most valuable B2B brand in the region, Emirati telecoms giant, Etisalat remains the most valuable B2C brand in the Middle East and Africa for the third consecutive year. The brand’s growing role in fulfilling the UAE’s National Innovation Strategy and its dominant influence in shaping the region’s digital future are behind its continued success. As the premier digital and telecommunications partner of the upcoming Expo2020 in Dubai this October, all eyes will be on Etisalat as it prepares to excite the Expo’s expected 25 million visitors with a seamless 5G connectivity that brings the event’s themes to life. Etisalat’s footprint in 16 countries across Asia, Middle East, and Africa makes it home to an impressive portfolio of brands including Mobily, Ufone, Maroc Telecom, PTCL, and Etisalat Misr. Demonstrating a consistent performance over the years, Etisalat retains its titles as the most valuable as well as strongest telecoms brand in the region.

As the Middle East’s fastest growing brand, Abu Dhabi National Oil Company (ADNOC) is the first UAE brand to achieve a brand valuation of more than USUS$10 billion, a testament to the success of the Group’s ongoing transformation strategy. Since 1971, ADNOC has created thousands of jobs, driven the growth of a diverse knowledge-based economy, and played a key role in Abu Dhabi’s global emergence. ADNOC continues to look for new and innovative ways to maximize the value of its resources, pioneering those approaches and technologies that will ensure it is able to meet the demands of an ever-changing energy market, and continue to have a positive impact on the Abu Dhabi economy for generations to come.

David Haigh, CEO of Brand Finance, said: “The Middle East, and in particular the GCC region, is home to more and more world class brands, as we have observed these powerhouses making their way up our rankings since Brand Finance undertook its first Global 500 study back in 2007. The leadership of these brands are to be commended, especially since both ADNOC and Saudi Aramco’s CEOs are new entrants to our Brand Guardianship Index study of the world’s top 100 CEOs. Etisalat’s role as the official Telecommunication and Digital Services Partner to the upcoming Expo2020 in the UAE is to be commended alongside its recent rollout of the fastest and most robust 5G network in the region.”


Lukoil Expects OPEC+ Deal to be Extended after March

Russia's number two oil producer Lukoil expects the deal between OPEC and other large producers to limit oil output to be extended beyond March, Interfax news agency cited its chief executive as saying on Thursday.

The pact is currently due to expire at the end of March. CEO Vagit Alekperov also said the company's investments currently stand at 650-670 billion roubles (US$10.5-US$10.8 billion).


Saudi Real Estate Refinance Co. in Refinance Deal with Bank AlJazira

Saudi Real Estate Refinance Company (SRC), a subsidiary of the Public Investment Fund (PIF), announced that it has signed a mortgage portfolio acquisition agreement with Bank AlJazira. The signing took place in the presence of Minister of Housing and Chairman of SRC Majed AlHogail. SRC will refinance SR250 million (US$66.717 million) of mortgage receivables with the bank, with subsequent anticipated transactions in the future under the memorandum of understanding (MoU).

Signed by Fabrice Susini, CEO of SRC, and Nabil Al Hoshan, CEO and Managing Director of Bank AlJazira, at a special ceremony held in Riyadh, the partnership agreement is in keeping with the shared commitment to supporting the growing Saudi home finance sector, said a statement.

Susini described the transaction as a significant step forward for Saudi citizens helping them realise the dream of owning a home. He said: “Today’s agreement with Bank AlJazira reinforces our commitment to providing lenders with liquidity while developing innovative finance solutions, and in doing so we help our citizens to climb the housing ladder. Portfolio acquisitions such as these will help us ensure that we are able to refinance at least around 10% of the market by the end of 2020, and 20% of the market by 2028.”

Susini also highlighted the impact the agreement has on housing goals attached to the Vision 2030 program, which focuses on fulfilling the growing needs and aspirations of Saudi citizens especially when it comes to home ownership that is expected to reach 70% by 2030.

Since establishment in 2017, SRC has acquired over 20 portfolios from various banks and mortgage finance companies, deployed more than SR2 billion (US$533.736 million) of balance sheet and committed to injecting a few more billions through MoUs signed with its partners, providing liquidity to originators and allowing them to originate more.

Al Hoshan said: “Since 2008, Bank AlJazira invested in the mortgage business and increasing its portfolio year on year which resulted in being one of the leaders in real estate finance market. We will continue our strong leadership in the real estate finance industry, and our commitment to customers is strengthened and improved by this transaction with SRC. I am especially proud that Bank AlJazira and SRC have joined hands to accelerate the mortgage ecosystem which will provide innovative solutions for the citizens.”


First Millennium Central Hotel to Debut in KSA

Millennium Hotels & Resorts Middle East has announced the signing of its first Millennium Central property in Saudi Arabia in partnership with Hasaad Real Estate, on stage at the Saudi Arabia Hospitality Investment Conference (SHIC), held in Riyadh from January 21-22. Following the opening of the first Millennium Central hotel in Downtown Dubai just six months ago, Millennium Central Jeddah will mark the brand’s debut in Saudi Arabia and is the fourth hotel in the Millennium Central brand portfolio.

A four-star hotel with 210 rooms and suites spread across two towers, the Millennium Central Jeddah will feature three food and beverage outlets, a swimming pool, a health club, three meeting rooms and an event hall with outdoor area. Commenting on the signing, Kevork Deldelian, who was recently promoted to chief executive officer, Millennium Hotels and Resorts MEA, said: “The signing of the Millennium Central Jeddah represents our ongoing commitment to development in Saudi Arabia, a market we have been operating in for five years.

“I’m proud to add the Millennium Central Jeddah to our Saudi Arabian portfolio, which comprises eight hotels in operation across Makkah, Madinah and Hail.” Millennium Central is the group’s urban four-star brand in central urban locations featuring contemporary design fused with local influences including signature art in each of the properties. In December, Millennium Hotels & Resorts MEA revealed its ambitious development plans for Saudi Arabia with a goal of operating 25 hotels kingdom-wide by 2025. The group is targeting strategic locations in every region across the country as it maps out its blueprint for growth over the next five years.


OPEC Predicts Slight Rise in Global Oil Demand

The Organization of Petroleum Exporting Countries (OPEC) has projected an increase in the global demand for oil to 100.98 million barrels per day (mb/d) during 2020, an increase of 1.22 mb/d compared to the average production of 99.77 mb/d for 2019.

World oil production includes all of the production of OPEC members in addition to other countries outside the organization that produce about 70% of global production, said a Wam news agency report.

Oil prices were supported by optimism about the outlook of oil market fundamentals, following easing trade tensions between the US and China and continued market stabilization efforts conducted under the Declaration of Cooperation, DoC, according to OPEC's Monthly Oil Market Report for January.

The latest figures released by OPEC show that the oil demand in the US and European countries in addition to countries bordering the Pacific will rise to 48.08 mb/d during the year 2020 compared to 47.99 mb/d in 2019.

In the Middle East, Latin America, Africa and other Asian countries, including India, the demand will rise to 33.79 mb/d during the current year compared to 33.11 mb/d in 2019. As for demand in China and some European countries, it will reach 19.11 mb/d compared to 18.66 mb/d.


Power Subsidies Cost GCC Tens of Billions of Dollars

The current electricity pricing policy in the GCC countries is unsustainable. Decades of subsidies have led to high consumption rates and wasted power, costing billions of dollars, according to a new study entitled ‘Electricity pricing reform: A bitter pill for GCC industries’, published by Strategy & Middle East, part of the PwC network. The region needs reform to achieve its ambitious industrialization agenda and have an economically viable electricity sector. However, there is an erroneous perception among large industrial companies that pricing reforms will put them at a competitive disadvantage thus creating a large resistance to them.

Commenting on the report, Dr Shihab Elborai, Partner with Strategy & Middle East said: “The current electricity pricing structure in the region cannot be sustained. Properly structured electricity pricing reforms can actually make electrical systems economically viable while also helping grow the region’s industrial base. To achieve these dual goals, tariffs must closely reflect the underlying costs that different types of users put on electrical systems.”

Specifically, large end users — industries that consume significant electricity at steady base loads with little or no variability throughout the year — have a very low cost to serve and should thus pay a lower tariff. Companies that consume less power but have large spikes in demand should pay a higher tariff, to cover their correspondingly large share of the costs from expensive peaking and cycling power generation assets.

Electricity makes up a much smaller share of the overall costs for this second group of customers. They have various options for mitigating the increase, such as becoming more energy-efficient, reducing costs in other areas, or passing modest increases on to their consumers.

“It is natural that these reforms could lead to opposition and pushback, but governments can use targeted support for affected groups, giving them time to adjust to higher tariffs,” added Elborai. Such electricity tariff reforms will spread the cost of power generation, transmission, and distribution infrastructure and operation more equitably among the full range of users, while ensuring that large industrial companies remain competitive.

The study estimates that the electricity subsidies have cost GCC countries more than US$120 billion over the past 20 years, and leaving these policies in place until 2030 would cost an additional US$150 billion as demand increases.

The recent developments in the region have made the problem starker. The push to industrialize GCC economies and to bring manufacturing supply chains to the region, along with increasing electrification of industrial processes, is creating soaring industrial demand for electricity. At the same time, population growth and quality of life improvements in the context of the GCC region’s hot and harsh climate have translated into an ever-rising residential demand for electrically powered cooling and refrigeration. Although residential tariffs are important, the focus should be on policies for commercial and industrial tariffs that need to be reassessed as they have a different political and social calculus as well as significant impact on the cost reflectiveness of the system.

Cost-reflective tariffs pose a social challenge to GCC countries. They could create a perception that the policy unfairly favors a few large industrial interests at the expense of many smaller interests. To succeed, any cost-reflective policy needs to consider the perspective of smaller non-energy intensive industrial and commercial users, and incorporate several measures to mitigate the impact on users who face higher tariffs. For example, governments can offer some level of financial support to help these users cover the higher costs, such as paying for some fixed connection charges. Governments can also help fund the installation of more energy-efficient equipment, or other measures during a transition period of several years, giving users time to make the necessary internal changes to adapt.


Bahrain Bourse 2nd-Best Performing Market in GCC

The Bahrain All Share index, the bellwether of the Bahrain Bourse (BHB), was the second-best performing market in the GCC in 2019, after remaining range bound in 2018. According to Kamco Research, a division of Kuwait-based non-banking financial firm Kamco, the index was up 20.4% for the year and closed at 1610.18 points at the end of December 2019. Commercial banks were the main drivers of the outperformance, as the sectoral index was up 42.5% for the year. The services index and investment index followed with gains of 18.4% and 5% respectively. On the decline side, industrials lost ground by 29.8% in 2019. Hotels and tourism and insurance indices followed with declines of 12.8% and 10% respectively. For December 2019, the Bahrain All Share index was up 5.5% month-on-month (MoM).

Commercial banks again were the best performers in the month, as the sectoral index was up 10% MoM, driven by AUB, as its share price gained by 1.8% MoM. Hotels and tourism and insurance indices followed with gains of 3% and 2.4% respectively. Looking at BHB as a whole, trading activity was down on all parameters in 2019, as average value traded was down from BD1.4 million (~US$3.6 million) in 2018 to BD1.2 million (~US$3.1 million)  in 2019.

Total value traded in 2019 fell as compared with the previous year, reaching BD286.41 million (~US$755 million)   in 2019 from BD323.83 million (~US$853.6 million)  in 2018, decreasing by 11.6% year-on-year. Total volumes traded decreased in comparison with last year by 19.7%, reaching 1,157.31m shares in 2019 compared with 1,441.08m shares in 2018. However, the average number of daily transactions surged by 7.73%.

Most of the trading activity was dominated by commercial banks with a value of BD191.37 million (~US$504.4 million)  capturing 66.8% of the total value of shares during 2019. The commercial banks sector also comprised 59.87% of the total volume of shares traded in the market. In terms of an investor split, Bahraini investors accounted for 60.28% of the total value of shares traded in 2019, while non-Bahraini investors accounted for 39.72% of the total value traded as per BHB. The market breadth was in favor of decliners, with 20 stocks seeing a decline while 14 stocks advanced during the period.

Kamco sees the voluntary acquisition of Bahrain Islamic Bank (BisB) by National Bank of Bahrain (NBB) as one of the key events this year. The open offer to BisB shareholders is expected to close today. It was announced last month that acceptances by BisB shareholders of the NBB offer had reached 47.64% of the bank’s issued share capital exceeding the 40.94% minimum acquisition condition, thereby rendering the offer unconditional.

The transaction will take place at either cash of BD0.117 million (~466,000)  per BisB share or a share exchange at a ratio of 0.167 NBB shares per BisB share. In ratings related action, S&P Global ratings has awarded GFH Financial Group, a ‘B’ long-term issuer credit rating on the strength of its earnings and ability to generate cash flows. The ratings agency assigned GFH a stable outlook after a review of the company’s four distinct business segments.

The rating agency also highlighted GFH Group’s ability to generate cash flows and its improving earnings, and expects the new treasury function and progress in its subsidiary Khaleeji Commercial Bank to likely contribute to an increase in income and its headline margins. Separately, Alba announced a new production record by exceeding the 1.36 million tons in 2019 – production stood at 1,365,005 tons, versus 1,011,101 tons in 2018, up by 35% year-on-year (YoY).Performance of the other GCC equity markets was also positive during the year, barring Oman where a decline of 7.9% was recorded. The MSCI GCC Index witnessed a gain of 5.9%, its fourth consecutive year of gains.


Dubai Electricity & Water Authority Making Use of AI to Drive Efficiency

The Dubai Electricity and Water Authority (Dewa) has continued its efforts to support the Smart Dubai initiative to make Dubai the smartest and happiest city in the world. Among its varied efforts, Dewa has embarked on an ambitious move to leverage AI technologies to consolidate energy sustainability and efficiency, through the launch of "Digital Dewa", the authority's digital arm set out to redefine the concept of a utility and become the world's first digital utility with autonomous renewable energy storage systems via the integration of AI, said a Wam news agency report.

Digital Dewa is based on four pillars: the launch of state-of-the-art solar technologies; the operation of a renewable energy network using innovative energy storage technologies; the expansion of integrated AI solutions; where Dubai will be the first city to provide electricity and water services using AI technologies, in addition to the Moro platform to deliver digital solutions locally and globally.

Dewa is also working on the implementation of pioneering and innovative projects, including a 250 MW pumped-storage hydroelectric power plant in Hatta, the first of its kind in the GCC region. The plant has a life span of 80 years.

Meanwhile, the green hydrogen pilot project will produce hydrogen using clean energy, the first of its kind in the Middle East and North Africa. The hydrogen produced will be stored and then used in various fields.

Dewa was one of the first government organizations to deliver all its services through multiple smart channels, in line with the directives of HH Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Crown Prince of Dubai and Chairman of Dubai Executive Council, to transform the government of Dubai into a fully smart model and make it the first paperless government by the end of 2021. The adoption of Dewa’s smart services has reached 94%.

Dewa’s Future Centre for Customer Happiness, which uses AI and Robotics, provides world-class smart services, including smart self-service booths to help customers quickly make paperless transactions. It includes Rammas, the Tayseer bill payment service, and remote support through live chat using robots.

Dewa launched its virtual employee Rammas on its smart app, website, Facebook page, Amazon’s Alexa, Google Home and robots. Rammas learns and understands customers’ needs based on their enquiries while analyzing these enquiries based on available data to accurately answer and streamline transactions with ease. Since its launch in the first quarter of 2017, Rammas has responded to over two million requests and queries through various channels. Dewa recently added the instant voice chat feature to Rammas in both Arabic and English, through its smart app, so that customers can get instant answers.


Dubai Islamic Bank Completes Acquisition of Noor Bank

Dubai Islamic Bank (DIB) has announced the completion of the acquisition of Noor Bank in a transaction structured through a share swap, after securing necessary approvals from the relevant regulatory authorities. As part of this agreement, DIB has issued 651,159,198 new shares to take its issued share capital to 7,240,744,377 shares.

In line with the acquisition process, Noor operations will be completely integrated into DIB. As the acquirer, DIB is fully committed to ensuring that the transition is seamless for customers of both banks and that they continue to enjoy the best possible banking experience throughout the integration, the bank said.

Mohammed Ibrahim Al Shaibani, Chairman of Dubai Islamic Bank, said: “Today marks the completion of another remarkable milestone in the journey of DIB and the UAE. The acquisition of Noor Bank is a landmark achievement, establishing DIB as one of the largest Islamic banks in the world and amongst the largest banking entities in the UAE. In line with our strategy, the completion of this deal means that we remain ideally positioned to expand our footprint in the region and beyond, in addition to supporting the UAE’s vision for growth and prosperity.”

Dr Adnan Chilwan, Group CEO, Dubai Islamic Bank, commented: “This is a momentous occasion for the banking profession in the region. The UAE is recognized as the epicenter of the Islamic economy and the completion of this acquisition will undoubtedly strengthen Dubai’s role as a global hub for Islamic finance, allowing greater investment and growth in key sectors such as infrastructure, innovation and services. I am proud to announce the successful acquisition of Noor Bank, positioning us as one of the world’s most prominent Islamic finance institutions.

“Having consistently outperformed the market in recent years, we are set to consolidate our position as one of the largest Islamic banks in the world with combined assets of over Dh275 billion (US$74.874 billion), and a leader in Islamic Finance in UAE. I am excited at the prospect of what we will achieve and look forward to seeing this transformative deal enhance the banking experience for our customers,” he said.

The acquisition and the ensuing integration are expected to generate significant synergies ensuring robust profitability and returns for the shareholders in the coming years, DIB said.


Iran a Major Producer of Glass in world

The secretary of Iran’s glass union says through producing 2.2 million tons of glass per year Iran is a leading producer of the product in the world. Making the remarks on the sidelines of the country’s 3rd International Exhibition of Glass, Equipment and Related Machinery, Hossein Zojjaji also said that glass export brings in US$200 million for the country per annum, IRIB reported. Zojjaji named Iraq, Armenia, Tajikistan, Azerbaijan, Persian Gulf littoral states, and some European countries as the main importers of Iranian glass.

Iran’s major glass production plants are producing 550,000 square meters of building glass per day, of which 60% is supplied to the domestic market and the rest is exported, the official announced.
The required raw materials are all domestically supplied and the good production and export condition have laid a proper ground for the Iranian companies and plants active in this sector, he further underlined.

Iran’s 3rd International Exhibition of Glass, Equipment and Related Machinery opened at Tehran Permanent International Fairgrounds on Thursday.

Edris Mazandarani, the chairman of the exhibition’s organizing headquarters, said this year’s event is participated by 60 Iranian companies in addition to some exhibitors form Turkey and China, Public Relations Department of Iran’s International Exhibitions Company reported.

Mentioning the 4% share of glass industry in domestic economy, Mazandarani said this exhibition is a valuable opportunity to boost this share.

Saying that Iran exports its glass to 35 countries, the official also stated that this exhibit can promote the export of this product.

He said the 3rd International Exhibition of Glass, Equipment and Related Machinery lays the ground for the Iranian exhibitors to present their products, services and achievements while benefiting from B2B meetings with the foreign companies to create some fruitful partnerships. - Tehran Times


Official: Trade between Iran, Kuwait can reach US$2 billion in Five Years

Iran and Kuwait can boost annual trade transactions with each other to US$2 billion, from the current figure of US$250 million, by setting out a five-year vision, said an Iranian official.
This is achievable in view of the two sides’ enormous trade capacities, added Mostafa Mousavi-Ameli, the vice president of the committee of Iran Chamber of Commerce, Industries, Mines and Agriculture (ICCIMA) for promotion of non-oil exports, in an exclusive interview with Iran Daily.

He described as an obstacle to the expansion of trade between the two countries, Kuwait’s refrainment from granting visas to Iranian traders, adding this can be resolved through diplomacy and negotiations between the two sides’ officials.

Excerpts of the interview follow:

Q: Would you please expound on Kuwait’s trade and economic capacities?

A: Since a long time, Kuwait has been famous, particularly in Iran, for its good economic conditions, as its people are financially able. The world’s strongest currency, currently, belongs to Kuwait, with the exchange rate between the dollar and the dinar standing at 4.5, meaning that the value of one dinar is as high as US$4.5.

Kuwait, however, has nothing to export but oil. Its other export activities are limited to re-exporting other country’s goods and products. Kuwait sits on the world’s fourth largest oil reserves, which, given the country’s small area and population, has caused its people to have a high annual per capita income. The country has heavily invested the capital it has accumulated though oil sales in international stock exchanges and, simultaneously, has kept the value of its currency stable. At present, Kuwaitis are deemed as big capitalists and trustworthy partners in international stock exchange markets. On the other hand, Kuwait is a very lucrative market as the people of the country are basically willing to spend heavily on purchasing products, particularly foodstuffs and pharmaceuticals. This provides other countries with the opportunity to expand their exports to the Arab state.

Q:To what extent do you think the potential exists for the two countries to expand trade and economic cooperation with each other?

Iranian and Kuwaiti people have a broad background of kinship and historical relations. Based on this, it can be said that Kuwait is not separate from Iran as a large number of people of Iranian origin, who are in possession of huge wealth, have been living in the Arab country for years. Currently, people of Iranian origin constitute close to 40% of Kuwait’s population. They had emigrated to Kuwait many years ago from the Iranian cities of Yazd, Isfahan, Shiraz, Behbahan, Khuzestan, Abadan, Khorramshahr, Ahvaz and Bushehr.

Up until 70 years ago, Kuwait’s trade transactions were mainly with India and Iran. Also, a major part of Kuwait’s population, close to 45%, comprises Shia Muslims, which is why the people of Kuwait feel an inclination toward Iran. In addition, compared to other Persian Gulf littoral states, Kuwait is a more democratic country. The value of trade between Iran and Kuwait currently stands at US$250 million, mostly comprising Iranian exports.

Q: What is the reason for the low volume of trade?

A: I personally believe that in Iran’s foreign policies and those of the Iranian Ministry of Industry, Mine and Trade, other regional states such as Iraq, Oman, Qatar and Afghanistan are given a higher priority. Iranian traders are faced with great difficulty for obtaining visas for Kuwait and marketing their products in the country.

This problem, however, has existed for 20 years and appears to be a political one. Kuwaitis are conservative toward Iran, seeking not to upset the US and Saudi Arabia. This, nevertheless, is resolvable through negotiations between Iranian and Kuwaiti officials.

Q: In whose favor is the trade balance?

A: It is in Iran’s favor. Major Iranian export items are foodstuffs, agricultural crops and construction materials. Iran’s handicrafts, luxury goods, dried fruits and polymers can also find lucrative markets in Kuwait. This is while Iran can import cars and auto spare parts from the Arab country.

Q: If all obstacles were removed, what would be the amount of annual trade between the two countries?

A: In that case, it could reach US$600 million in a year and US$2 billion in five years.

Q: Can Kuwait be a lucrative market for Iran’s techno-engineering services?

A: Yes, in the field of building construction and exporting constructional materials. - Iran Daily



Tehran Hosts Intl. Bitumen, Asphalt Expo

The 11th International Bitumen, Asphalt, Insulation and Related Machinery Exhibition of Iran (BAIEX 2020) opened at the Tehran Permanent International Fairgrounds on Thursday, IRIB reported. Over 130 companies participated in this year’s exhibition to showcase their latest products and achievements.

According to the organizers, the exhibition in this event is aimed to showcase the country’s capacities and capabilities in the bitumen and asphalt sectors. The event is also aimed to provide a platform for domestic companies to exchange knowledge and experience. The exhibition will wrap up on Sunday. - Tehran Times


Iranian Builders Supply 85% of Oil Industry Equipment

The chairmen of the board of directors of the Iranian Oil Industry Equipment Manufacturers Association said that the share of Iranian manufacturers and craftsmen in the supply of oil industry equipment has reached 85%. Majid Mohammadpour, speaking on the sidelines of the 16th Kish International Energy Exhibition, said that the share of Iranian manufacturers and industrialists in the supply of petroleum products and equipment has reached 85%.

He said technical knowhow of producing 65% of overwhelmingly used petroleum industry items has been developed domestically and we have adopted reverse engineering methods to localize another 20% of the items. Mohammadpour added: “Oil industry equipment manufacturers tap all their capacities and opportunities to tackle the sanctions and supply the goods needed for the country's oil industry projects and facilities.” - Shana



Latest US Sanctions Unlikely to End Iran-China Crude Flows: Analysts

New US sanctions aimed at shutting down illicit petroleum and petrochemical trade between Iran and China will not substantially impact China's status as the top importer of Iranian crude, with more than 200,000 b/d of illicit flows expected to continue, analysts said Friday.

"With these new sanctions, the US is essentially mowing the lawn on illicit Chinese trade," said Henry Rome, an Iran analyst with the Eurasia Group. "US sanctions have thus far not deterred much of it, hence the need for frequent rounds of new action."

Late Thursday, the US Treasury and State departments announced new sanctions on petrochemical and petroleum companies in Hong Kong, Dubai and Shanghai for facilitating hundreds of millions of dollars in crude oil, petrochemical, and refined product exports from the National Iranian Oil Company. According to Treasury, one company, Triliance Petrochemical Co., a Hong Kong-based broker which ordered the transfer of millions of dollars in payments to NIOC for Iranian petrochemical, crude, and petroleum products shipped to the UAE and China in 2019.

The sanctions come as Iranian crude oil and condensate exports have plummeted to under 394,000 b/d in December 2019 from nearly 2.7 million b/d in April 2018, according to cFlow, Platts trade flow software data and shipping sources. Yet China remains the largest importer, taking in 201,000 b/d in December, more than half of Iran's total exports, according to Platts and shipping sources.

In recent months, a large share of Iranian oil flowing to China has been going through the UAE and Malaysia, both of which are popular hubs for ship-to-ship transfers, according to sources. With little hope of sanctions relief in the near term, Iranian oil exports will be capped at about 400,000 through 2020, according to Paul Sheldon, chief political adviser with S&P Global Platts Analytics.

Richard Nephew, the principal deputy coordinator for sanctions policy at the State Department during the Obama administration, said Friday that this week's sanctions will do little to disrupt this trade. "I see this as a one-off and trade will continue," Nephew said Friday. "This is one network. There are and will be others." Eurasia Group's Rome added that Thursday's sanctions were the Trump administration's effort "to balance a desire to pare down trade with Iran while also steering clear of Chinese majors."

Last week, Treasury Secretary Steven Mnuchin said Chinese state-owned companies have ceased buying Iranian oil, suggesting that only independent refiners continue making such purchases. He added that the US was "working closely with [China] to make sure that they cease all additional activities [with Iran]." Mnuchin said that Treasury and State Department officials have met with Chinese officials to discuss curtailing imports of Iranian oil.

In September, the US Treasury Department sanctioned six Chinese entities and their top executives, including two affiliates of Cosco Shipping, for trading oil with Iran in violation of US sanctions. The US previously sanctioned China's state-owned trading company Zhuhai Zhenrong and its top executive for oil trade with Iran. - Platts


Report on Iran's Steel Exports

Iran expects its steel exports to touch 10 million tons in the year to March 19, 2020 despite “tyrannical” sanctions imposed on the country by the US. The exports will bring in four to five billion dollars for the country which is hard pressed for money amid an aggressive US push to sink Iran’s oil revenues to zero, head of Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO) Khodadad Gharibpour said, reported Press TV.

Earlier this month, the Trump administration imposed new sanctions on Iran’s metals sector, targeting the construction, manufacturing, textiles, mining, aluminum, copper, iron, and steel industries, Treasury Secretary Steven Mnuchin said. They came on the back of the first set of sanctions imposed last May on export revenues from Iran’s industrial metals sector which the US government said constituted 10% of the country’s export economy."

The measure put “other nations on notice that allowing Iranian steel and other metals into your ports will no longer be tolerated,” US President Donald Trump said in a statement at the time.
Last month, the US government warned against exports of steelmaking materials to Iran, including graphite electrodes and needle coke.

However, Iran’s Minister of Industry, Mine and Trade Reza Rahmani put the damper on Washington’s haughty grandstanding, saying Iranian producers had obtained the technology to make graphite electrodes.

“The aim of harsh American sanctions on the metal industry is to stop Iran’s exports, but this did not happen practically and we are seeing a boom in exports,” Gharibpour said.

Over the current Iranian year, he said, exports of National Iranian Copper Industries Company and Mobarakeh Steel Company have risen by more than US$1 billion.

Iran is a leading producer of steel in the world, with officials saying exports continue despite the US sanctions. The country plans to raise steel output to 55 million tons a year by 2025, of which 20 to 25 million tons would be earmarked for export. Deputy Minister of Industry, Mine and Trade Jafar Sarghini said last month Iran has currently 35 million tons of steel production capacity. Several steel units with an overall capacity of 10 million tons are currently being built with above 50% of physical progress, while another 10 million tons of capacity has been defined to be established, he said. - Iran Daily


Iran's Garment Output Rises in 9 Months On Year

Iranian Industry, Mine & Trade Minister Announced that the country’s garment output has risen 20% during the first nine months of the current Iranian calendar year (March 21-December 21, 2019), IRIB reported. Speaking in a meeting with the domestic producers of clothes, Reza Rahmani said, “The growth in garment sector indicates promotion of domestic production, and if there will be any problem in this field we will try to remove it and in the case of any violation of the law we will confront it seriously.”

The chairman of Iran’s Union of Garments Producers and Sellers has said that boosting garment output and exports is atop agenda of their activities in the current Iranian calendar year (ends on March 19). Back in July 2019, Abolghassem Shirazi had announced that domestic units were supplying 70%-80% of the requirement for clothing inside the country. He said, “After the ban imposed on the imports of clothing, domestic units are taking all endeavors to boost the quality and quantity of their products in a way that we saw no shortage in clothing market before the new year holiday (early March).” He also mentioned seriously combatting with smuggling in garment market.

Since the US re-imposed sanctions on Iran to pressure the country’s economy, Iran has been taking all necessary measures to mitigate the impact of the sanctions and counter the US actions.
Improving and boosting domestic production has been one of the major strategies that Iran has been following in the past two years in order to increase its independence. To this end, the Iranian government has put supporting domestic producers atop agenda in the current year. Providing the required working capital for the production units and offering them facilities is one of the major measures being pursued by the government to support such units.

Last week, Deputy Industry, Mine, and Trade Minister for Industry Affairs announced that domestic production has saved the country over €1.2 billion since the beginning of the current Iranian calendar year (March 21, 2019). “So far, the contracts and agreements signed [with domestic producers] with the support of the domestic production promotion expert desks have resulted in a reduction of foreign currency expenditure by 1.2 billion euros,” Mehdi Sadeghi Niaraki said.

Speaking in a gathering of the heads of the country’s industry, mine and trade organizations, Niaraki said: “The main focus of the ministry’s programs for the current year is on the domestic production boom.” “So far, the ministry has managed to establish nine expert desks for promotion of domestic production in various areas including automotive, motorcycle, petrochemicals, and telecommunications, as well as copper and steel industries, and by the end of the current year we will hold seven more such desks”, he said. The official noted that the ministry’s programs for the promotion of domestic production are going to save US$10 billion for the country in the next two years.

There is a big opportunity for existing textile and apparel plants to expand and for new entrants to set up shop. In addition, the Iranian currency’s depreciation has provided an additional boon by cutting imports and smuggling, which are the nagging problem of the industry. Smuggled clothing costs Iran and its apparel producers heavily in lost revenues. - Tehran Times, fashionatingworld


Barkindo: Too Early to Talk about OPEC+ Deal Extension Until End-2020

OPEC Secretary-General Mohammad Barkindo said on Thursday it was premature to talk about the possibility of a global deal on oil production curbs being extended until the end of this year, TASS news agency reports. The deal between the OPEC and its allies, known as OPEC+, expires after March.


Fujairah to Reveal New Storage & Refining Projects

Fujairah, the biggest bunkering hub in the Middle East, is about to reveal plans for new storage and refining projects as it reclaims more land to make way for future demand, an official told S&P Global Platts.

Register Now Fujairah Oil Industry Zone, the authority managing the land used for storage tanks and refining in the UAE emirate, will announce details soon, Captain Salem al-Hamoudi, who is FOIZ director, said in an interview. "This year they (new projects) are likely to be more tankage (mixed products and crude) and refinery," he said at the zone's headquarters.

Fujairah, the eastern emirate of the seven-member UAE federation, is capitalizing on its position outside the Strait of Hormuz to attract investments that have typically gone into bunkering operations. Now the emirate wants to boost its profile by adding more refining and crude storage, among other facilities.

For that purpose, FOIZ is expanding available land by about 7% and reclaiming some .66 sq km from the sea in the next 15 to 16 months, which will boost the total area to 10.6 sq km. Around 30% of the reclamation is complete, he said.

"There is room for crude which is partially there," al-Hamoudi said. "Derivatives are there already and we are aiming nowadays for LPG, LNG and petrochemicals as well as adding more refining capacity. This is the basket we are aiming at for the new land."

Refining capacity
Currently there are two major refineries in Fujairah, both of which can produce low sulfur fuel oil in compliance with the International Maritime Organization's mandate to have 0.5% sulfur content starting this year from 3.5% previously.

Vitol's refinery has a processing capacity of up to 82,000 b/d. Uniper's facility can refine 67,000 b/d and produce about 3.6 million t/year of marine fuels with sulfur content as low as 0.1%, according to its website.

UAE-based Brooge Petroleum and Gas Investment Co. is building a 24,000 b/d refinery that will produce mainly low-sulfur fuel oil in the first quarter of this year.

The pivot toward cleaner fuels has prompted Fujairah to consider using LNG as bunkering fuel in the future and is talking to various investors about this project, which will be launched once there is a demand for the commodity, al-Hamoudi said.

Currently Fujairah has crude and oil products storage capacity exceeding 10 million cubic meters with plans to reach up to 16 million cubic meters in 2023.

Part of this new capacity will come from Abu Dhabi National Oil Co., the UAE's biggest oil producer pumping some 3 million b/d, which is building the world's largest single-site underground crude storage in Fujairah's mountains adjacent to the port. The caverns will have three compartments; each can hold 14 million barrels.

Mountain caverns
Now Fujairah would like to replicate this idea and invite other national oil companies to store their crude in the emirate's mountains, according to Captain Mousa Murad, the port's general manager.

"We are thinking about how we are going to sell underground storage in place of tank storage because right now we do not have enough land," Murad said in a separate interview recently.

"The mountains are available especially for big companies. It may also be cheaper and safer."

Besides ADNOC, some of the other big oil companies operating in Fujairah include Saudi Aramco, which opened a trading office in the emirate last year.


Iran's Ministry Talks Contaminated Milk, Polluted Corn Rumors

All the food products in Iran are under control of the country's Ministry of Health and there's no production outside of the set standards, said the Head of Agricultural Jihad Ministry of Iran Abbas Keshavarz, Trend reports via ISNA. Keshavarz was commenting on rumors that milk in Iran is contaminated with aflatoxin.

Aflatoxicosis is the disease caused by the consumption of high levels of aflatoxins. At low levels of intake, usually there are no visual symptoms of aflatoxicosis, and as such the problem is often unnoticed. However, high concentrations of aflatoxins, or prolonged exposure at low levels, cause visual symptoms in cattle, and especially in young calves. The diagnosis of aflatoxicosis is often difficult because of the variation in clinical signs, gross pathological conditions, and the presence of secondary infectious diseases due to the suppression of the immune system. In addition, under commercial conditions, more than one mycotoxin may be present in any contaminated feed, and this makes definitive diagnosis of aflatoxicosis quite difficult. The carry over rate of aflatoxins from contaminated feed into milk in dairy cows is considered to average 1%–2%. However, in high yielding cows, which consume significant amounts of concentrated feeds, the carry over rate of aflatoxin M1 into milk can reach 6.2%.

Keshavarz pointed out that the level of standards in the country are strict. "Not one kilogram of polluted corn has entered the country, so there's nothing to worry about," he said, referring to more rumors about Iran importing polluted corn. Also, Keshavarz pointed to the per capita consumption of agricultural inputs in the country and stated that on average

He also pointed to the per capita consumption of agricultural inputs in the country and stated that on average Iran has the pessticide consumption at around 30,000 tons and more than 80% of pesticides are produced domestically. “Fertilizer consumption is also about 3 million tons, more than 2.6 million of which produced domestically,” he said. - Trend


All Options on Table at OPEC+ Meet: Saudi Minister

Saudi Arabia's Minister of Energy Prince Abdulaziz bin Salman Al-Saud said all options are open at an OPEC+ meeting in March, including further cuts in oil production, Al Arabiya television reported on Thursday.


Qatar Investment Authority Not Planning to Expand Holdings in Oil & Gas

Qatar’s sovereign wealth fund plans to shift into greener assets, according to chief executive officer Mansoor bin Ebrahim al-Mahmoud. “We’re not going to invest more in the coal business,” he said on Wednesday in a Bloomberg TV interview in Davos, Switzerland. The US$328 billion Qatar Investment Authority also doesn’t plan to significantly expand its holdings in oil and gas.

“We have some investment in oil and gas companies; this is a fact, and this is a sector that you cannot ignore,” al-Mahmoud said. Still, given that Qatar relies heavily on income from natural gas, the fund needs to diversify beyond the energy sector, he said. “So I don’t see that this part of the portfolio will expand that much,” he said.

Sustainability and climate change are a major theme at this year’s annual World Economic Forum, which has been held in the Swiss Alpine town of Davos since the 1970s. The event attracts the world’s most important lawmakers and wealthiest people and this year at least 119 billionaires are converging to join bankers, politicians and other grandees for the pilgrimage.

The QIA focuses on opportunities outside Qatar in an attempt to diversify the country’s wealth beyond its vast natural-gas reserves, which is a cleaner energy source.

Al-Mahmoud said the QIA will keep the climate fight squarely in view as it increases its investment in infrastructure, which is already an “important component of our portfolio.” He said 44% of the fund’s infrastructure projects are zero-emission investments.

The QIA chief also said he’s “very optimistic” about prospects for the global economy in 2020, particularly after the US and China reached an agreement on the first phase of trade negotiations. Concern over trade prospects between the world’s largest economies “is one of the events that we are ranking number one in terms of risk management,” he said.

Governments will have to use fiscal policy rather than relying on monetary easing to keep the global economy humming, al-Mahmoud said. “Central banks have reached their bottom and they don’t have any leverage” to stimulate the economy, he said.