Arabs to step up trade liberalisation

Mar 29, 2002 01:00 AM

An Arab summit resolution adopted in Beirut to advance the establishment of a pan-Arab free trade zone was the highlight of the Middle East's business week. Unlike the political complications of the summit which ended in the Lebanese capital, the resolution calling for "speeding up the completion of the Greater Arab Free Trade Zone" encountered no snags.
The Arab leaders specified no deadline for the establishment of this zone in the summit's final statement, but their economy ministers have set 2005 as a target date. The setting up of this zone was first announced in 1996, at an Arab summit in Cairo which had initially set its completion date for 2007.
The project has been ratified so far by 14 of the 22 Arab League members -- Saudi Arabia, Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Syria, Tunisia and the United Arab Emirates --, which started in 1998 to lower tariffs on goods from the other Arab states. Elsewhere in the Middle East, oil and gas related developments made the business headlines.

The London-based Energy Compass review has disclosed details of the tough bargaining between Saudi Arabia and eight foreign firms selected last year to develop three gas fields -- ExxonMobil, Shell, BP, Phillips, TotalFinaElf, Conoco, Occidental and Marathon. Saudi Arabia has suggested to the companies rates of return between 8 % and 12 % on their $ 20 bn investment, and the firms are asking for 15 % "at the very least," said the review.
The companies are assembled in three consortia tasked each to bring one field on stream and set up facilities to use its gas as feedstock, such as petrochemical, power and water desalination plants. Because of the "stalemate," ExxonMobil, which leads two consortia, has decided to pull out of the Saudi eastern city of Khobar its technical staff assigned to carry out the South Ghawar field project, said the review.
But ExxonMobil's negotiating team remains in Riyadh, it added. On the gas news front, Qatar has announced that it would become the world's biggest LNG exporter by 2010, with expected annual sales of 35 mm tons, compared to 27 mm tons currently.

Qatari Energy Minister Abdullah al-Attiyah said China, Taiwan and EU nations were among the potential LNG customers of Qatar, a tiny Gulf emirate which holds the world's third largest gas reserves after Russia and Iran.
Iran's aim to export gas to Europe via Turkey is also moving forward with Greek Development Minister Akis Tsohatzopoulos arriving in Ankara for discussions centred on this project. Deliveries to Greece are to be made through an extension of the Iranian-Turkish gas pipeline which went on stream in December, Tsohatzopoulos told, putting the cost of the project at $ 300 mm (EUR 341.9 mm).
The United Arab Emirates was the scene of a major accident as more than 20 workers drowned after a wall of water flooded into a giant dry dock in Dubai. In the tourism sector, Saudi Prince Al-Walid bin Talal bin Abdul Aziz signed a contract with Libya to establish a jointly-owned hotel group in which he holds 60 % of its $ 20 mm capital.

Source: AFP
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