1997 04 05 Saturday No. : 07697
DUBAI CONFERENCE ON EURO-ARAB CO-OPERATION FOR PEACE PROCESS
No economic co-operation can be achieved unless conflicts are resolved peacefully, the participants at the Dubai Conference on Euro-Arab Co-operation for the Peace Process, which concludes today, were told yesterday. They were discussing various aspects to end the present political and economic turmoil that prevailed in the Euro-Arab regions, which 'invariably hindered development of social life.'
Presenting his paper, Professor Giacomo Luciani, of ENI, Italy referred to the difficulties facing economic co-operation due to political issues, the conflict between Europe and the Arab Gulf Co-operation Council, AGCC countries over the carbon tax, co-operation between the private sectors of the two sides, investments in North Africa and the Middle East and the vast growth of demand on energy in the Mediterranean area between 1995-2010.
According to him, political conflicts had prevented the emergence of the regional poles, which, in turn had marred the development of trade in the region. "It is therefore important that political conflicts are eliminated in order to pursue economic co-operation," he added.
The tariff regime for refined products and petrochemicals and the tax systems on petroleum have been responsible for the sluggish progress in dialogue between the European Union, EU, and AGCC countries, stated the Professor while presenting the European paperwork at the economic session of the Conference. According to him, minimum points of difference have prevented progress in other areas and the creation of a regional market for natural gas should pave the way for the establishment of a more productive relationship.
The Euro-AGCC dialogue was initiated in 1981, and co-operation agreements between Europe and the Gulf were reached in 1988. "The EU is the Gulf's largest economic partner, with actual bilateral trade over $ 35.0 billion, the majority of which is in Europe's favour," Luciani said. Referring to the region's trade with other countries, he pointed out that the degree of openness in the Middle East and North African, MENA countries, was very limited with regard to international trade.
He cited that Iran, Turkey, Egypt and many other countries in the region were not particularly open with regard to foreign trade. However, he lauded the UAE and Bahrain for their "relatively large degree of openness" in international trade.
Generally, Middle East and North African countries,MENA are important for the EU but they are fragmented and disorganised. When it comes to trade figures, MENA's participation in international trade is unsatisfactory, said Luciani. "About 44.8% of MENA countries' imports are from the EU while 29.8% of their exports are to the EU. Europeans only import 3.7% from MENA countries while 5.1% are absorbed by MENA countries," he added.
MENA economies are characterised by a limited degree of openness to international trade and given that some countries are relatively small, they cannot be competitive in a broad range of goods. They should seek specialisation and greater reliance on international trade, said Luciani. He explained that as a result of this 'limited openness', the share of world trade by MENA has been falling consistently ever since 1980. He also stated that the fall was due to the decline in the price of crude oil.
"However, since the decline has continued even after 1985, it shows that there is serious danger that these countries are losing the trend towards globalisation and are running the risk of isolation and fragmentation," he said. "There is an imbalance in the trade between the EU and the MENA countries. The EU is a very important partner for these countries as it accounts for a large percentage of the MENA imports," he said and remarked that while the MENA countries consider the EU as an important partner, the EU did not do so. Luciani urged the Arab nations to open trade pacts with each other.
The Italian official also mentioned that the progress between the EU and the AGCC had been less satisfactory. He attributed the problem to the non establishment of customs union among the GCC countries. Calling for more avenues for the involvement of private sector in the peace processes, Luciani stressed that privatisation is not a panacea. It is a difficult policy that needs to be pursued aggressively in order to achieve progress in this account (of peace). "One condition for the privatisation process, he underlined, was the development of financial markets.
Comparing the Far Eastern countries and Latin American nations with regard to Foreign Direct Investments, FDIs, he said MENA was lagging behind with regards to FDI flows into the region. "This is a major draw back, given the fact that FDI is the most important aspect for financing international projects," he noted. "In the MENA region, the importance of regional trade has been constantly falling, both in terms of imports and exports, which is a major problem that needs to be addressed by the Euro-Arab Co-operation. Far Eastern countries are growing rapidly and are participating in the international trade," he said.
The participants at the second day's session were also told that energy and water are the two major areas where there is potential for co-operation. It is estimated that between 1995 and 2010, the region might need to spend approximately $18.0 billion per year in order to satisfy the domestic energy and water needs of the North African and Near Eastern countries. It is a large potential in which the private sector in particular can participate. In electricity, especially that which is gas related, an estimated $250 billion is expected to be spent annually. (Covered by all media from various angles: this report from the Emirates News and the Gulf News)
ADNOC TO INVEST MORE FUNDS TO DEVELOP OIL, GAS SECTORS
The Abu Dhabi National Oil Company, ADNOC, will invest $1 billion per year over the next five years to further develop its oil and gas facilities, a report said yesterday. ADNOC currently produces 1.85 million barrels of oil per day, against a production capacity in excess of 2.5 million barrels a day. It is seeking to apply new technology developed by its experienced international partners including British Petroleum and Total, which will raise Abu Dhabi's production capacity to more than three million barrels a day.
The report published in the monthly Gulf Business said that while the majority of Abu Dhabi's oil will remain destined for markets in the Far East, primarily Japan, a significant portion will be destined for its refining interests abroad. These include the Austrian oil giant OMV and the Pak-Arab refinery in Pakistan. Indeed, ADNOC's overseas investment arm, IPIC, will provide Abu Dhabi oil with new markets, including a planned 100,00.00 barrels a day oil refinery near the central Pakistani town of Multan.
It is also considering an invitation to take an equity stake in two major Polish refineries, as well as planning a major expansion of domestic refining capacity. The biggest current project is the $1.8 billion Ruwais refinery expansion, which has been split into seven packages, though only three seem to be moving at present, while the remaining four have been put on hold.
Package one, currently in the bidding stage, involves the construction of a 130,000.0 barrels per day condensate processing unit, one 45,000.0 barrels per day fuel sweetening unit, one 45,000.0 barrels per day kerosine sweetening unit and 23 storage tanks. Seven companies are bidding for the estimated $200.0 million contract scheduled to be completed in 1999.
Ten engineering and turbine manufacturers are bidding for the $450.0 million second package. It comprises the construction of a 280.0MW power plant at Ruwais, with the option to expand it up to 450.0 megawatts. The project also includes construction of a 132.0KV substation and the construction of a major seawater intake facility. The final scope of work is still to be established.
The other package in the bidding stage is the estimated $30.0 million package number seven for construction of an administrative building, a laboratory and control towers, fire station, mosque and ablution facilities, refinery gatehouse, roads and external works. Meanwhile, ADNOC is a majority partner in Abu Dhabi Gas Liquefaction Company. It exports five million tonnes a year to Tokyo Electric Power Company, TEPCO, under a 25-year term contract ending 2019. A second major gas export project is the planned supply of 500.0 million cubic feet per day to Dubai.
However, Abu Dhabi will devote most of the development of its 204.6 trillion cubic feet in gas reserves to domestic UAE energy and industrial requirements. Development of the Khuff gas reservoir, which lies under the Umm Shaif and Abu Bakhoosh oilfields will cost around $800.0 million. This will include construction of five new well-head platforms, gas gathering facilities, a gas processing platform and an offshore pipeline between Abu Al Bakhoosh and Umm Shaif. From here gas will be transported to Taweela for processing and then it will be sent to Jebel Ali through an overland pipeline.
ADNOC has also received technical bids for the estimated $500.0 million phase one of the Asab Gas Development project. This comprises construction of the central processing facility, the condensate pipeline and the off-sites and utilities. Package two is being handled by ADNOC's subsidiary Abu Dhabi Onshore Operating Company, ADCO, which will operate the central processing facility. This package involves processing 830.0 million cubic feet a day of wet gas from the Thamama F and G reservoirs in the Asab field.
The company has also awarded a contract to France's Technip Geoproduction for the Front End and Engineering, FEED, of its Onshore Gas Development, OGD 23, which involves drilling of 52 wells in the Thamama C and D reservoirs to produce 1,130.0 million cubic feet per day of wet gas. This project is a near repeat of the OGD 1, except for the fact that the dry gas produced will be used to meet the rising domestic demand for gas, while at OGD 1 treated gas was re-injected into oil reservoirs to maintain pressure.
The ADNOC subsidiary ADGAS operates three LNG trains at Das Island. Its biggest customer is the TEPCO but the company has also sold some gas in the open market to some European and American firms including ENAGAS of Spain. Development of Abu Dhabi's natural gas reserves will also play a major role in developing the emirate's industrial sector, providing both energy and feedstock to its planned multi-billion-dollar petrochemical projects.
The company has set up a $85.00 million joint venture with Scandinavian petrochemical giant Borealis for a 600,000.0 tonnes a year ethylene cracker. ADNOC recently awarded a management contract for the project to US firm Fluor Daniel. FEED and EPC contracts will be awarded later this year.
ADNOC will also develop a $600.0 million Ethylene Dichloride project at Ruwais which will have a capacity of 540,000.0 tonnes per year of caustic soda. the product will be used in the local industry and export purposes. At the same time, ADNOC is talking to Sumitomo Corporation of Japan, and Mobil Corporation of the United States, to develop a $900.0 million aromatics complex at Ruwais. (The Emirates News)
There was confirmation this week of the recent sighting of one of the UAE's rarest animals, the Arabian Tahr. First identified in the country only half a century ago, when explorer Sir Wilfred Thesiger found them on Jebel Hafit (Hafit Mountain), the Tahr was believed to have become extinct in the Emirates after 1983, when a carcass was found, again on Jebel Hafit.
A couple of years ago, however, researchers working for the Sharjah-based Arabian Leopard Trust, ALT, found a mother and young in the mountains of Fujairah, proving that a small population still survived in the remoter areas. Numbers of Tahr in Fujairah have been estimated at only half a dozen or so. Now, thanks to the keen eyes of visiting birdwatchers, another animal - an adult male - has been identified by a group from London's 'Birdwatching Breaks' in the early morning of March 10. Once again, it's interesting to note, the sighting was on the very crest of Jebel Hafit.
Described as being very shy, it quickly ran off over the mountain - though not before providing the lucky viewers with full-frame views. In terms of its total numbers, the Arabian Tahr is probably about as endangered in the UAE as the Arabian Leopard, with fewer than 10 likely to exist in the wild, thus making both of them good candidates for immediate protection measures. While it is clearly of enormous importance that it has now been proven that the Jebel Hafit population of Tahr still exists, it also serves to show that there is plenty of great interest upon which the fortunate observer may stumble in the UAE. (The Emirates News)