Basmati Exporters Hold Shipments to Iran Fearing Payment Defaults



With no let-up in the US sanctions on Iran and the prolonged standoff only getting worse by the day, Indian basmati exporters are holding on their shipments to Iran, fearing payment defaults or delays. The lack of clarity on future exports and imports from Iran, coupled with growing uncertainty over payment terms going forward, have made the exporters jittery of meeting their export commitments with counterparts in Iran. “Unless there is new agreement with the Iranian government on export terms, we've decided to put shipments on hold as there are chances of defaults and money getting stuck,” Kohinoor Foods joint managing director Gurnam Arora told Business Standard.

Although, there is no definite data available as per the consignment stuck on this count, it is pegged at 20,000-30,000 tons at present with possibility of accumulation if situation persists. While basmati exports to Iran stood at nearly a million tons (MT) last year, they were estimated at nearly 1.4 million tons this year, a hike of 40%. In its report, rating agency Icra had even forecast that export market demand would remain steady over the next few quarters, ably supported by resumption of imports in the key market of Iran. This was before the US sanctions came in. The apprehensions of Indian basmati exporters have accentuated over lingering suspense on the continuity of Indian import of Iranian crude in backdrop of the US sanctions. Earlier, the Centre had apprised the visiting Iranian foreign minister of taking a call on the issue post Lok Sabha polls.

“So far, our exports were denominated in rupee terms and there was barter trade against oil, but now there is utter confusion on the mater. Therefore, the exporters have been advised by our association to hold on to their respective shipments unless there is some clarity,” he said. Nonetheless, the exporters are not overtly worried, at least in the short term, given the shortage of basmati in the domestic market owing to lower crop output. “Our consignment could be sent to other destinations if Iran bound contracts do not materialize. Besides, basmati market has witnessed some upswing owing to short supply this season,” Arora informed. The exporters are awaiting the formation of the new central government and the policy stance it takes regarding exports and imports, including Iran.

Icra assistant vice president Deepak Jotwani said although there was no restriction of trade with Iran, yet there was lack of clarity on issues of payment and continuity of export. “We expect these issues to be sorted out with the new government at the Centre.” However, he claimed even temporary suspension of basmati trade with Iran would impact the market, since Iran was a major destination for Indian basmati rice. “Much would also depend upon what Iran also decides regarding the import of commodity from India.”

Till a few weeks back, basmati exports were projected to hit record levels of Rs 30,000 crore (~US$4.28 billion) this season. While, basmati export basket is wide, most exported variety of Pusa 1121 had witnessed average procurement price of Rs 35,000 (~US$503) -38,000 (~US$546) per ton during the current 2018-19 season, compared to Rs 33,000 (~US$474) -35,000 (~US$503) per ton during 2017-18, a hike of 8.5%.

However, basmati export realization inflated at a much higher ratio of 14% to more than Rs 74,000 (~US$1,063) per ton during Apr-Jan 2018-19 against Rs 65,000 (~US$934) per ton during the corresponding period of last financial year. Continuing the growth momentum, India had clocked basmati exports worth US$ 4.10 billion during the first 10 months of 2018-19, which was nearly 12% higher compared to US$3.68 billion in the corresponding period last fiscal.

Basmati paddy prices have been ruling high over the last two financial years 2016-17 and 2017-18, while in the current season, basmati production has been lower by 5% due to the decline in acreage as some farmers had shifted to non-basmati varieties due to a considerable increase in Minimum Support Price (MSP), besides some loss of crop due to untimely rainfall in a few key Basmati growing states.

As a result, the paddy prices firmed up by more than 10% across varieties. The increase in basmati average realizations is likely to sustain in the first half of 2019-20 owing to the increase in paddy costs in the recently concluded procurement season and steady international as well as domestic demand outlook, ICRA note added. - Business Standard 


26/05/2019




Fitch: Qatari Banks Face Growing Risks from Real Estate Downturn



Qatari banks face growing pressure from high exposure to the country’s sluggish real estate market, hit by oversupply tied to preparations for its 2022 World Cup, ratings agency Fitch said. The tiny but wealthy GCC state has seen its rental prices slide by 20% over the past three years. Analysts expect these prices to fall further as a wave of projects tied to the tournament come online over the next three years.

Qatar has had the added challenge of a diplomatic and trade boycott imposed by Saudi Arabia, the United Arab Emirates, Bahrain and Egypt since 2017. The move has hit tourism and dampened demand for real estate from foreign buyers. The bloc accuses Qatar of supporting terrorism, which Doha denies. Qatar has since moved to liberalize its real estate sector, opening up new areas to foreign buying in a bid to boost demand.

While Qatari banks have largely bounced back from liquidity issues arising from the 2017 boycott, when around US$30 billion in deposits left the system, Fitch said deteriorating real estate assets are now a “key risk.” “Qatari banks’ concentrated exposure to the weakening domestic real estate market is an increasing risk to asset quality,” Fitch said, naming Doha Bank, Commercial Bank, and International Bank of Qatar as the most exposed.

“The real estate and hospitality sectors, already facing falling prices due to oversupply in preparation for the 2022 World Cup, have been further pressured by reduced tourism and occupancy rates resulting from the boycott of Qatar.” Fitch said however that Qatari banks’ credit ratings would not be affected “as they are driven by our assumption of the authorities’ propensity and ability to provide support to the banks, if needed.” Qatar injected about US$40 billion into its banking system in the months after the boycott in order to boost liquidity.


26/05/2019




Official: Production to Hike at Iraqi Field



Iraq will increase production at its giant West Qurna 1 oilfield to 490,000 barrels per day (bpd) in the “next few days”, a senior Iraqi oil official said on Wednesday. West Qurna1 oilfield, developed by Exxon Mobil, currently produces about 440,000 bpd, Basra Oil Company chief Ihsan Abdul Jabbar told Reuters.

Exxon Mobil evacuated all of its foreign staff, around 60 people, from West Qurna1 on Saturday, just days after the United States withdrew non-essential staff from its embassy in Baghdad, citing a threat from neighboring Iran, which has close ties to Iraqi Shi’ite militia.


26/05/2019




UAE Says Joint Probe into Tanker Attack Ensures Impartiality



The United Arab Emirates said on Wednesday that the participation of several countries in an investigation into last week’s attack on oil tankers off its coast would support the “impartiality and transparency” of the findings.

The GCC state has not yet blamed anyone for the acts of sabotage on four vessels including two Saudi oil tankers, but a senior UAE official has said Abu Dhabi was concerned about Iranian behavior in the region.

“The keenness of our international partners to participate in the investigation and the concerted efforts support the impartiality and transparency in arriving at results,” the UAE foreign ministry said in a statement carried on state news agency WAM.

U.S. government sources told Reuters they believe Iran encouraged Yemen’s Iran-aligned Houthi group or Iraq-based Shi’ite militias to carry out the operation. Tehran has distanced itself from the attack, which comes as Iran and the United States spar over sanctions and the U.S. military presence in the GCC region.

The UAE foreign ministry statement welcomed the participation of several “friendly and brotherly” countries in the investigation, but did not name them. It did not give a timeframe, saying the probe would take “the time required”.

UAE officials have said that the United States and France, which has a naval base in Abu Dhabi, were participating in the investigation as well as Saudi Arabia and Norway. A Norwegian-registered oil products tanker and a UAE fuel bunker barge were among the vessels hit near Fujairah emirate, one of the world’s largest bunkering hubs located just outside the Strait of Hormuz.

UAE Minister of State for Foreign Affairs Anwar Gargash has said Abu Dhabi would show restraint after the attack and that it was committed to de-escalation during what he described as a “difficult situation” caused by Iranian behavior in the region.

Sunni Muslim ally Saudi Arabia has called for emergency GCC and Arab summits in Mecca on May 30 to discuss the implications of the tanker attack and an armed drone strike two days later on Saudi oil installations in the kingdom, for which the Houthis have claimed responsibility.


26/05/2019




Report on Iranian Arvand Field Investment Potential



Until a couple of years ago, development of the oil and gas fields Iran shares with neighboring countries had been slowed due to financial and technical shortages in Iran, thereby helping neighboring nations make big gains.

But after international sanctions were lifted on Iran following the 2015 nuclear deal with six world powers, hopes were raised for investment in the jointly owned fields. International oil companies endowed with financial resources, as well as advanced technology can come to Iran and develop joint fields.

Iran has shifted its focus on the development of joint oil and gas fields located mainly in South Pars and West Karoun. In the West Karoun area, Iran shares oil fields with Iraq. Three West Karoun oil fields recently started production.

The fields shared with Iraq have been proposed to foreign investors for future cooperation. Foreign companies can sign agreement with Iran based on the newly developed model of contract – Iran Petroleum Contract (IPC).

One of these fields in question is Arvand Oil Field. The Arvand is located 50 kilometers south of Abadan in Khuzestan Province. It lies at the entry of Arvandroud River. The field is 42 kilometers long and 13 kilometers wide.

Arvand is estimated to contain one billion barrels of oil in place with a recovery rate of 15%. Arvand also holds over 14 Bcm of dry gas and 55 million barrels of gas condensate. Discovered in 2008, the Arvand field lies along Iran-Iraq border. Drilling had started in Arvand in 2006 for the purpose of estimating the hydrocarbon potential of the formations in the Khami and Bangestan centers.

Four well logging operations were carried out in the Fahlyan formation to prove the existence of oil and gas in that formation. The Fahlyan formation holds light crude oil with API gravity at about 44. The Arvand field is administered by the Arvandan Oil and Gas Production Company (AOGPC) whose production is estimated to reach 1.4 mb/d by 2025.

AOGPC is estimated to have the highest oil and gas production rate in the coming decade. A major facility inside this field is a 165,000-barrel-per-day processing unit. This treatment unit was built by National Iranian Oil Company during years when Iran was under sanctions. A variety of crude oil may be processed at this facility. Thanks to the existence of this treatment facility, the return of investment will be fast. Any investment in the development of the Arvand field will have a good rate of return. The short distance between the Arvand field and the treatment facility is an indicator of the fast development of the oil field.

Several years ago, an agreement was signed between AOGPC and the Iranian Offshore Engineering and Construction Company (IOEC) for the development of the Arvand field, but the agreement was never implemented due to financial and other problems.

The Arvand field is expected to produce 5,000 b/d of oil in the first phase, which would reach 20,000 b/d in the final phase. The investment needed for the development of this field stands at US$135 million, which is likely to increase. The API gravity of oil contained in Arvand varies between 39 and 43. The Arvand oil is planned to be delivered to the Abadan refinery.

Iran and Iraq share eight oil fields along their joint border with combined recoverable reserves of 14 billion barrels. The eight fields are Dehloran, Naftshahr, West Paydar, Azar, Azadegan, Yadavaran, Dehloran and Arvand. These fields have different names on the Iraqi side. 9% of Iran's crude oil reserves exist in the fields shared with Iraq. As recovery from jointly owned fields leads to migration of hydrocarbon, NIOC officials are concentrating on the development of such fields.

Courtesy of Iran Petroleum

- Shana


26/05/2019




Iranian Doroud Field Awaiting Foreign Investment



Iran’s 2015 historic nuclear deal with the West is known as the biggest important event in the petroleum industry in recent years. The agreement, which was achieved after 10 years of intensive diplomatic talks, cleared the way for the return of Iran’s oil to global markets. Iran intended to take advantage of this opportunity to relaunch ageing oil and gas fields, as well as decrepit petroleum industry infrastructure by attracting Western capital and expertise. Iran intended to raise its oil production to 5 mb/d by the end of its 20-year vision plan. In this regard, old onshore and offshore fields are instrumental.

Doroud Oil Field, which is located in Kharg Island and northwest of the Persian Gulf, is among developed oil fields which the Iranian Offshore Oil Company (IOOC) presented to foreign investors within the framework of the new model of oil contracts – the Iran Petroleum Contract (IPC). Nearly 16 years have now passed since an agreement was signed for the development of the Doroud field. Enhanced recovery from the field has not been achieved despite gas injection since 2008.

According to the Department for Economic and Financial Feasibility Studies of National Iranian Oil Company’s Directorate of Corporate Planning, the investment needed in the Doroud field over four years has been calculated, which would be secured through signing F, EPCF and EPDF deals. The project costs will be recouped over a six-year period from the increase in the crude oil production capacity.

The package of investment for the integrated development of IOOC oil and gas fields has been drawn up in line with Iran’s law on removal of barriers to competitive production and upgrading the fiscal system. It will take effect after the acquisition of necessary permits from NIOC Board of Directors and the Economic Council and signing agreements with investors. This investment package takes into consideration compliance with Iran’s fifth five-year economic development plan for the prioritization of development projects including development of jointly owned oil and gas fields.

Doroud field development project is along IOOC-run projects open to investment. IOOC is a leading company in applying ESP to wells and gas lifting in the country. It intends to focus on improving the rate of recovery from hydrocarbon fields nominated for investment. Over the past four decades, Doroud has been developed twice. It is now ready to undergo the third phase of development.

Doroud is estimated to contain 7.6 billion barrels of oil in place. Due to 33-year recovery from this field and non-timely injection of water and gas, only 1.5 billion barrels of oil was recoverable from this field. But now due to development activities in this field, the recoverable amount is expected to rise to 2.5 billion barrels.

Currently, Doroud is producing on average 15,431 b/d of oil from its offshore wells and 36,500 b/d from its onshore wells. In 1997, 42 wells were drilled in the oil field. Eighteen offshore wells and 23 onshore wells have been drilled and completed.

The crude oil processing installations are used for treating 100,000 b/d offshore and 110,000 b/d onshore. About 1.6 billion barrels of oil has been recovered from this field over the past four decades. Oil production from Doroud came to a halt during the 1980-1988 imposed war. The first wave of enhanced recovery from the Doroud field started in 2002 at the rate of 15,000 to 16,000 b/d. In the following years, production increased as new wells were drilled in this oil field.

When Iran signed an agreement with France’s energy giant Total in 1999 for the development of Doroud, each barrel of oil was US$20. Total acquired Elf and Agip to make good investment in Iran. The French company failed to inject gas into Doroud on schedule and the project was halted mid-way. But it must be taken into consideration that in recent years as average oil prices have been at US$40 a barrel, this project has been profitable for Iran with a quick rate of return on investment.

Before the gas injection section of the Doroud field was launched in Kharg Island, many Iranian petroleum industry experts recommended that due to the unprecedented high pressure gas injection (6,000 psi) into the field and its unknown consequences, the gas injection section be transferred from Total to the client after completion of the water injection and oil production process. In the meantime, the geologically complicated structure of the Doroud field and the location of this oil field in Kharg Island slowed down the pace of drilling in the first years of development of this field as simultaneous onshore and offshore work was tough.

Courtesy of Iran Petroleum

- Shana


26/05/2019




Ukraine Envoy Calls For Formation of Joint Trading House



Ukraine's envoy to Iran Sergei Burdyliak suggested the establishment of a joint trading house with Iran, in pursuit of boosting bilateral cooperation. “In this trading house, Ukranian and Iranian companies will provide the other side with their produced goods,” Burdyliak said in a press conference on Saturday. “There are some goods whose raw materials are produced in Iran, such materials can be processed in Ukraine and then exported to Europe,” he added. “I suggest the trading house to be registered in Ukraine with branch offices in both countries,” he said, “Trade transactions can rely on the two countries’ currencies.”

“Industrial companies can be established under the framework of the joint trading house as well to ease production of specific goods and expansion of bilateral ties,” the envoy added. Ukraine is keen to boost trade relations with Iran.

In October 2018, Iranian ambassador to Kiev Manouchehr Moradi and Chairman of Ukraine's Chamber of Commerce and Industry Gennadiy Chyzhykov called for exploring ways to broaden trade and economic times between the two countries. Also, in the same month, a meeting was held between Moradi and Ukraine’s deputy foreign minister Sergiy Kyslytsya, where the two sides conferred on bilateral cooperation in various economic and political fields. - Mehr


26/05/2019




Iran Tells German Envoy Its Patience Is Over



Iran told a German envoy seeking to preserve the 2015 nuclear deal that its patience was over and urged the treaty’s remaining signatories to fulfil their commitments after the United States pulled out, the Fars news agency reported on Thursday. Jens Ploetner, a political director in the German Foreign Ministry, met Iranian Deputy Foreign Minister Abbas Araghchi. A German diplomatic source told Reuters that talks with other Iranian official were also planned. The semi-official Fars news agency said Araghchi had relayed Iran’s impatience during the talks.

Britain, France and Germany, which signed the 2015 deal along with the United States, China and Russia, are determined to show they can compensate for last year’s US withdrawal from the deal, protect trade and still dissuade Tehran from quitting an accord designed to prevent it developing a nuclear bomb. But Iran’s decision earlier this month to backtrack from some commitments in response to US measures to cripple its economy threatens to unravel the deal, under which Tehran agreed to curbs on its uranium enrichment program in exchange for the removal of most international sanctions.

“At the center of the political director’s visit is the preservation of the Vienna nuclear accord (JCPOA),” the German diplomatic source told Reuters. “After Iran’s announcement to partly suspend its commitments under the JCPOA, there is a window of opportunity for diplomacy to persuade Iran to continue to fully comply with the JCPOA.” Ploetner knows Araghchi from the negotiations to clinch the JCPOA (Joint Comprehensive Plan of Action).

Tensions have soared between Iran and the United States since Washington sent more military forces to the Middle East, including an aircraft carrier, B-52 bombers and Patriot missiles, in a show of force against what US officials say are Iranian threats to its troops and interests in the region.On Wednesday, US officials said the Defense Department was considering a US military request to send about 5,000 additional troops to the Middle East.

Despite such pressure, Keyvan Khosravi, a spokesman for Iran’s Supreme National Security Council reiterated on Thursday that there would be no negotiations with Washington. He said officials from several countries had visited Iran recently, “mostly representing the United States”, but that Tehran’s message to them was firm. “Without exception, the message of the power and resistance of the Iranian nation was conveyed to them,” he said.

Fars earlier quoted a senior commander of the powerful Revolutionary Guards as saying the US-Iranian standoff was a “clash of wills” and any enemy “adventurism” would meet a crushing response.
The German diplomatic source added: “The situation in the Persian Gulf and the region, and the situation around the Vienna nuclear accord is extremely serious. There is a real risk of escalation...In this situation, dialogue is very important.” - Reuters

 


26/05/2019




Iran's NIDC Localizes Jacking System



The National Iranian Drilling Company (NIDC) has launched the localized elevating System of jack up rigs for Shahid Modaress Marine Drilling Rig in Khark coastal waters. According to the company, the system was launched on Tuesday (May 22) after technical and engineering studies, for the first time in the country. Speaking in a ceremony to launch the system, Seyed Abdullah Mousavi, NIDC CEO, said: "Launching the localized jacking system was aimed at ensuring self-sufficiency, and self-reliance in line with the resilient economy principles by relying on domestic capabilities, which shows that there is no limit to the development of the oil industry in Iran.” He added: "Based on the calculations, the reconstruction of the Shahid Modarress drilling rig by foreign companies and contractors would cost €2 million while, by tapping domestic capabilities of NIDC, it was launched by IRR 15 billion (~US$107,142). ”Every Euro is traded at roughly IRR 160,000.
Mousavi further said that NIDC had so far drilled 656,600 meters of oil and gas wells in offshore fields which included 398 wells so far. - Shana

 


26/05/2019




Official Declines New Position in Iran's SP Phase 14 Development Consortium



In correspondence held with the Minister of Industry, Mine & Trade Reza Rahmani, Mohammad Reza Nematzadeh declined the positon for being the minister's plenipotentiary representative in Consortium for Development of SP Phase(s) 14.  - Miz-e Naft


26/05/2019




US Grants Waiver to Iraq to Buy Iran’s Energy



The US envoy to Baghdad said Washington has exempted Baghdad from some of its unilateral anti-Iran sanctions, allowing Iraq to continue importing energy from Iran. US Charge d’Affaires Joey Hood told reporters on Wednesday that Baghdad can now buy energy from Iran, a report by Al-Alam News Network said. The waiver will allow Iraq to continue buying gas ( Gas Exports to Iraq )and electricity from Iran.

The administration of US President Donald Trump said in March it was extending a 90-day waiver for the second time to let Iraq continue energy imports from Iran. The US envoy did not explain whether he was referring to the same waiver Washington gave Baghdad in March or he was declaring the issuance of new exemptions.

Gas imports from Iran generate as much as 45% of Iraq’s 14,000 megawatts of electricity consumed daily. Iran transmits another 1,000 megawatts directly, making itself an indispensable energy source for its Arab neighbor.

Iraq and Iran share a 1,400-kilometer-long border. For their run-of-the-mill maintenance, Iraqis depend on Iranian companies for many things, from food to machinery, electricity, natural gas, fruits and vegetables.

The Trump administration is pressing Iraq to stop buying natural gas and electricity from Iran, but Baghdad is pushing back against the pressure, The New York Times reported in February. In his remarks, the US envoy also pointed to reports of Baghdad’s efforts to mediate between Tehran and Washington, and said he was unaware of such mediation. “We do not know of the existence of Iraqi mediation” between the US and Iran, he said, adding that he welcomes the opportunity to consult with the Iraqi government. “It is possible to communicate with Iran directly and the embassy’s objective is to sustain the stability of Iraq to be strong and stable and protect it from any tension in the region,” he said.

Iraqi Prime Minister Adel Abdul Mahdi said on Tuesday that his country is set to send delegations to the US and Iran to help “halt tension” between the two sides amid growing concerns over a military conflict as Washington ratchets up its belligerent rhetoric against Tehran and builds up its military presence in the region. “Iraq has high-level contacts (with both parties) and its vision is very close to that of the European Union, which seeks to settle the crisis in the region,” Abdul Mahdi said at a weekly press briefing in the capital Baghdad. “US and Iranian officials have assured us that they do not want to go to war,” he pointed out. Abdul Mahdi added, “Iraq is in the stage of transferring messages between Washington and Tehran. It tries to defuse a crisis between the two sides. It is our responsibility to defend Iraq and its people, and ensure security in the face of the threat of war. - Iran Daily


26/05/2019




Opec+ Pact Hurting Russia Economic Growth



The Opec+ pact is hurting the Russian economy, potentially giving President Vladimir Putin a reason not to agree on an extension of the deal. While higher crude prices can bring the Kremlin additional revenue, production cuts are weighing on one of the country’s biggest industries. As the Russian leader decides whether to prolong the curbs into the second half, he may have to weigh his desire for faster economic growth against the benefits of his alliance with Saudi Arabia. “The Opec+ deal was one of the factors behind slower economic growth in Russia in the first quarter,” said Kirill Tremasov, a former economy ministry official who’s now an analyst at Loko-Invest in Moscow. “Given the oil price is now comfortable for the state budget and that crude producers are willing to pump up more, Russia may not want to extend the deal.”

Russia’s GDP unexpectedly grew just 0.5% in the first quarter, below all 14 estimates in a Bloomberg survey. That compares with a 2.7% increase in the last three months of 2018, which was the highest in more than six years as crude output reached a record 11.45 million barrels a day in December, according to ministry data as Opec+ curbs eased. In its deal with the Organization of the Petroleum Exporting Countries, Moscow pledged to reduce the country’s oil output by 228,000 barrels a day. While many of its Opec allies, including the group’s de-facto leader Saudi Arabia, say they prefer extending the agreement, which expires next month, Russia has talked about relaxing the cuts. The economy ministry reiterated that the current deal is “a restraining” factor for the nation’s hydrocarbon production and mining. Data due is forecast to show that annual growth in industrial output was 2% in April, with estimates ranging from 0.8% to 3.9%, according to a Bloomberg survey of 15 economists.

Putin, who previously stated Russia will continue cooperation with Opec+, is keeping all options on the table. “There are plans of our companies to develop new deposits, and we have a very attentive approach to that. We understand that the production shouldn’t stop, investment should come to the sector, otherwise that may create problems both for us and for global energy,” Putin said last month. “That’s why there will be balanced decisions.” Fixed-capital investment in oil and natural gas output fell 2.3% last year, leading to an “extremely low” growth of investment in hydrocarbon production and mining, compared with a 2.2% total increase of fixed-capital investment, according to calculations from the Centre of Development Institute at the Higher School of Economics. Rosneft PJSC, which pumps almost a half of Russia’s daily production, warned there will be a postponement of some projects for a few months “as a minimum” amid uncertainty over the Opec+ deal.

While the decline in output under the Opec+ agreement is a negative for the economy, any slowdown is “easily offset by significant additional revenues that appear from higher oil prices” resulting from the deal, said Stanislav Murashov, an economist at Raiffeisenbank in Moscow. “With such global uncertainty and trade wars, Russian government is likely to prefer additional revenues that will increase its safety cushion,” he said. The Opec+ agreement has boosted the federal budget amid higher prices for energy commodities, which account for almost half of state finances. Additional revenue for the budget was about 6 trillion roubles (US$93 billion) in the past two years, based on an energy ministry estimate that the output-cut deal resulted in a US$10 increase per barrel in prices. Under the so-called budget rule, all extra revenue from oil prices above US$40 per barrel is transferred to a rainy-day fund which is now worth US$59 billion, or 3.6% of GDP.


26/05/2019




UAE’s DMCC Completes Roadshows & Presentations in Europe, China



DMCC, a major free zone and Government of Dubai Authority on commodities trade and enterprise, has completed roadshows and presentations this month in Sweden, the UK and China, highlighting the opportunities available through DMCC for companies seeking expansion to global markets through Dubai.

DMCC’s senior management visited the cities of Gothenburg and Stockholm in Sweden for the first time with its Made for Trade Live international corporate roadshow.

The events were held in partnership with the Swedish Trade and Investment Council (‘Business Sweden’), and with the support of the United Arab Emirates Embassy in Sweden, and the Swedish Embassy in the UAE, said a statement from DMCC, which is headquartered in Dubai.

A total of 80 Swedish business leaders and senior delegates attended the events, and discussed wide ranging issues such as Dubai’s economic growth, governance, regulation and trade; as well as DMCC’s infrastructure, products and services, and the positive impact Expo 2020 Dubai will have on the city’s local economy and the opportunity on offer to foreign companies.

The next stop on the Made for Trade Live roadshow was London. Staged in partnership with the London Chamber of Commerce and Industry, over 100 leading names of British business gathered in the room to discuss the opportunities for growth presented by Dubai.

DMCC’s position as a commercial hub and gateway to global trade flows was the focus of the discussion, especially within the context ongoing developments connected to Brexit. To date, there are over 1,400 British firms registered with DMCC.

Executive chairman and CEO Ahmed Bin Sulayem said: "Our mandate at DMCC is to drive new trade flows to Dubai. These roadshows enable us to do just that by communicating the Dubai story and highlighting DMCC’s commercial appeal to foreign businesses."

"Our first visit to Sweden was very successful, and we look forward to working more closely with the Swedish business community and building partnerships in a new market," he noted.

With bilateral trade between the UAE and the United Kingdom expected to reach approximately Dh121 billion by 2020, it was important to visit London again this year, stated Bin Sulayem.

"DMCC offers British firms an unprecedented opportunity to expand their enterprise, and the economic impact of Expo 2020 Dubai should be appealing to all ambitious companies looking to do business in this part of the world," he added.

Peter Bishop, Deputy Executive Chief, London Chamber of Commerce and Industry, said: "We are delighted to partner with DMCC on this project. Representing the interests of London businesses, it made sense for us to support the latest Made for Trade Live roadshow and communicate the tremendous opportunity in Dubai for British firms."

"Our members represent some of the finest businesses in the capital, and I was encouraged to learn of the support offered by DMCC to foreign companies seeking to do business in the Middle East, Africa and Asia and beyond," he noted.

Meanwhile, Feryal Ahmadi, chief operating officer at DMCC, was invited by the Chinese Government to speak at the International Forum on Free Trade Zones Development, a two-day forum in Hainan focused on promoting free trade.

The event was organized by the China Council for the Promotion of International Trade (CCPIT) and The People's Government of Hainan Province.

"DMCC has become a commercial hub and a critical connection point for trade ties between the UAE and China," stated Ahmadi.

"Committed to driving the next phase of commercial growth between the two countries, DMCC has embarked on a comprehensive strategy to attract Chinese firms to DMCC. We have launched a range of bespoke Chinese-language services that have seen a rise of Chinese companies set up in Dubai and register with DMCC," he noted.

"This is only the beginning and we look forward to creating more opportunity for Chinese firms in Dubai which will in turn, support China’s Belt and Road Initiative," added Ahmadi.

Since its inception, DMCC attracted over 3,000 businesses from 17 cities around the world to its international roadshows. The program brings together business leaders interested in expanding their home base and offers them insights into the commercial appeal of Dubai and the opportunities it offers for growth in the region and beyond.


26/05/2019




Saudi Aramco to Operate Jazan Refinery, PRefChem by End-2019



Oil giant Saudi Aramco is expected to start operating Jazan Oil Refinery - one of three large refineries of petroleum in Saudi Arabia - by the end of 2019, a report said. Aramco, the world's largest oil producer, might operate Pengerang Refining & Petrochemical (PRefChem) in Malaysia by the end of this year. PRefChem is a strategic alliance between Petroliam Nasional Berhad (PETRONAS), the national oil company of Malaysia, and Saudi Aramco. Aramco will also open Hyundai Oilbank refinery in South Korea during the same year, the report said.

In April, Saudi Aramco has signed a deal with Hyundai Heavy Industries Holdings to acquire a 17% stake, or 41.66 million shares, in Hyundai Oilbank for US$1.2 billion. Accordingly, Saudi Aramco will be the second largest shareholder in Hyundai Oilbank, followed by Hyundai Motor Co. with 4.3%, while Hyundai Heavy Industries Holdings will retain a 74.1% stake. Aramco, the world’s most profitable company, noted that the refinery capacity will reach 6.3 million barrels per day.


26/05/2019




Dewa: Dubai's MBR Solar Park 2nd Phase Making Steady Progress



Dubai Electricity and Water Authority (Dewa) said steady progress is being made on the 300MW second phase of the Mohammed bin Rashid Al Maktoum Solar Park which will be operational in late June. This will add a total of 600MW of clean energy to Dewa's network from July this year to January 2020.

Mohammed bin Rashid Al Maktoum Solar Park is the largest single-site solar park in the world based on the Independent Power Producer (IPP) model. Once completed, it will generate 5,000MW by 2030 with investments of up to Dh50 billion (US$13.6 billion). Dewa said the construction of the 300MW third stage started earlier this year and will be operational in 2020.

The first stage has a capacity of 200MW and became operational in May 2018. It uses unique technologies, including over 800,000 self-cleaning solar cells that use robots to maintain efficiency. This stage provides over 60,000 residences with electricity, reducing over 270,000 ton of carbon emissions every year. According to Dewa, the 13MW photovoltaic Phase One of the MBR Solar Park became operational in 2013.

"The 200MW photovoltaic second phase of the solar park was launched in March 2017, and the 800MW photovoltaic third phase will be operational by 2020," remarked Saeed Mohammed Al Tayer, the managing director and CEO after reviewing the progress of the 300 megawatt (MW) second stage of the Mohammed bin Rashid Al Maktoum Solar Park.

During the visit, Al Tayer was accompanied by Waleed Salman, Executive VP of Business Development & Excellence at Dewa; Jamal Shaheen Al Hammadi, VP of Clean Energy & Diversification at Dewa and other officials.

Dewa is building the 800MW third phase of the solar park using photovoltaic technology in three stages, in partnership with a consortium led by Abu Dhabi Future Energy Company (Masdar) and EDF Group, through its subsidiary EDF Énergies Nouvelles.

This solar plant is the first of its kind in the Middle East and North Africa, with an advanced solar tracking system to increase generation efficiency by 20%-30% when compared to fixed installations.

Dewa recorded a world record in the cost of photovoltaic solar power for this phase of the solar park, at a LeveliZed Cost of Energy (LCOE) of US$2.99 cents per kilowatthour, using photovoltaic solar panels.

The fourth phase of the solar park is the largest single-site solar IPP project in the world and combines CSP and photovoltaic technology. The phase will use hybrid technologies to produce 950MW of clean energy.

The Dubai utility established Shuaa Energy 2 with a 60% stake in the company in partnership with the Masdar-led consortium, and Électricité de France (EDF), through its subsidiary EDF Énergies Nouvelles.

The consortium owns the remaining 40% of the company; Masdar owns 24% and EDF Énergies Nouvelles owns 16%. The international consortium led by the renewable energy contractors GranSolar and Acciona from Spain and Ghella from Italy are handling the engineering, procurement, and construction (EPC).

Dewa had issued a Request for Qualification (RFQ) for developers to build and operate the fifth phase of the solar park with a capacity of 900MW. The phase will use photovoltaic solar panels based on the IPP model and will be commissioned in stages from Q2 2021.


26/05/2019




Tourism Ministry of Oman to Open China Office



An Omani delegation led by the Public Authority for Investment Promotion and Export Development (Ithraa) visited a number of large companies in China’s Yunnan Province to apprise them of the investment opportunities in the Sultanate. The delegation visited the Yunnan State Farm Company Limited, a major state-owned agricultural processing enterprise in Yunnan Province. Members of the Omani team also toured the Yunnan Group, a conglomeration of transportation and communications firms. Both sides explored avenues for cooperation between the two countries.

Earlier, Nasima bint Yahya al Baloushi, Director General of Investments and Exports, addressed the International Smart Tourism Forum under way in China. Her presentation outlined the Sultanate’s investments in tourism infrastructure, the growth of hotel investments, and efforts by the government to attract new capital into this key industry. The ministry is set to open a representative office in China this year in light of the increasing number of Chinese tourists visiting the Sultanate, he said. The SEZ Authority of Duqm is also making the most of its presence at the International Smart Tourism Exhibition to introduce the Chinese business community the Duqm’s tourism potential.


26/05/2019