Category: Gulf Cooperation Council


DUBAI – Oman and neighboring Gulf states must move towards curtailing energy consumption drastically, reduce subsidies and boost efficiencies to keep the region’s rapidly rising oil and gas demand in check, the sultanate’s top energy official said Monday.

“We must drastically reduce our consumption, not only in Oman but in the region as a whole,” Oman’s Minister of Oil and Gas Dr. Mohammed Hamad Al-Rumhy said in a national keynote address at the first Gulf Intelligence Oman Energy Forum in Muscat today. The forum’s theme is focused on game changers impacting the Omani and global energy industry.

Today, the six Gulf Cooperation Council (GCC) states consume more primary energy than the whole of Africa even though their population is only one-twentieth the size of the continent’s, according to Chatham House’s Saving Oil and Gas in the Gulf report published in August. Heavily-subsidized energy has fuelled consumption growth in the region in recent years and led to rising energy subsidy bills for governments. According to International Monetary Fund estimates, energy subsidy costs in GCC countries ranged from 9-28% of government revenues in 2011.

“Subsidy is killing us. We should preserve energy on a daily level and use it wisely, which we’re not doing. We can do so much ourselves. We don’t need to start any nuclear, coal, bio-fuel activities in Oman,” the minister said. He added that there wasn’t much need for the sultanate to pursue renewable energy projects at present as “there is enough gas in the world.”

Abdulla Bin Hamad Al-Attiyah, President of Qatar’s Administrative Control & Transparency Authority and the country’s former oil minister, said in an on-stage interview at today’s forum that GCC states need to make a collective effort to curtail energy subsidies or be faced with drastic consequences.

“This is not a single country issue but a GCC problem. The region needs to move quickly to find a solution,” he said.

The emergence of Gulf states as major energy consumers has fuelled concerns over their ability to maintain oil export capacity. Domestic oil consumption among Organization of Petroleum Exporting Countries (OPEC) members has increased seven‐fold in 40 years, to 8.5 million bpd. They consume almost as much oil as China, which is equivalent to one-fourth of their production.

According to OPEC Secretary General Abdalla Salem El-Badri, who gave the international keynote address at the forum, the organization should be able to produce an additional 6 million barrels per day (bpd) of crude by 2018.

The increase would make up for declining output elsewhere, in particular in the U.S. where tight oil output is expected to start declining that year, El Badri said. OPEC output stood at 30.05 million bpd in September, down 400,000 bpd versus August levels.

Oman is the largest oil producer in the Middle East that is not a member of OPEC. The sultanate has set ambitious targets to boost the share of oil it produces from Enhanced Oil Recovery projects by 2021 in a bid to sustain a five-year trend of rising crude production levels. The country is also moving forward with an ambitious program to diversify the local economy as it seeks to reduce its dependence on income from hydrocarbons, add value to its oil and gas resources, and create jobs for its young and growing population, while at the same time strengthening ties with East Africa and South Asia.

“Oman is in an advantageous position and we must continue to make the most of our geographical location. We, as a nation, are at the gateway of the rapidly expanding regional as well as Asian and African markets,” said Mulham Al-Jarf, Deputy CEO of Oman Oil Company, which is the Title Partner at the Gulf Intelligence Oman Energy Forum.

Today’s forum is also being addressed by Nasser K. Al Jashmi, Under Secretary at Oman’s Ministry of Oil & Gas on the sultanate’s Oil & Gas In-Country-Value Program, and Dr. Aldo Flores-Quiroga, Secretary General, International Energy Forum (IEF) on Building New Partnerships for Post-Easy Oil Era.

Source: Middle East Online.


by Linda Gradstein

Wednesday, December 05, 2012

New Tunnel Will to Ease Traffic Congestion

Anyone who has ever driven through Abu Dhabi at rush hour has wished that, like Batman, his car could sprout wings and fly over the traffic jam. That still hasn’t happened, but motorists now have the next best thing – a two-mile long tunnel, one of the longest in the Middle East.

“This is very good for Abu Dhabi,” Safar al-Mazrouei, a spokesman for the Abu Dhabi municipality told The Media Line. “We are very happy that the project is finally finished.”

The project cost $844 million and took more than five years to complete. It takes motorists from the entrance to the city to the cornice or the port in about 10 minutes.

“Before this tunnel the trip could take up to an hour during rush hour,” Dr. Theodore Karasik, director for research and development at The Institute for Near East Gulf  Military Analysis in Dubai told The Media Line. “This is going to make a tremendous difference.”

The tunnel has four lanes in each direction, and motorists can travel at 50 miles per hour. There is a video incident detection system that notifies a control room within 20 seconds if a car has stopped. An advanced system monitors changes in temperature in the tunnel.

If a fire increases the temperature suddenly, an alarm will sound. If the temperature continues to rise, an automatic system will spray mist until firefighters arrive. There are also nine generators in case of a power failure, and 99 fire hoses placed every 60 yards.

The tunnel is part of an extensive economic plan called Abu Dhabi 2030. “The government of Abu Dhabi published a long-term plan for the transformation of the Emirate’s economy, including a reduced reliance on the oil sector as a source of economic activity over time and a greater focus on knowledge-based industries in the future,” as described in the government’s website.

Abu Dhabi is the capital of the United Arab Emirates (UAE) and the second largest city after Dubai. There are an estimated 3.8 million foreign workers in the UAE, most of them in the oil industry. As the population of residents and workers has increased, the existing transportation infrastructure had grown increasingly strained.

Since Abu Dhabi is the capital of the Emirates, and the seat of government and business, many residents from outside Abu Dhabi enter each day. There is no public transportation system, and gasoline is subsidized. All of that adds up to heavy traffic.

Officials hope the new tunnel will give the new tunnel will give the UAE an economic boost as well.

“The story is more than the tunnel itself,” Karasik said. “It’s about Abu Dhabi growing as a major economic hub on the Arabian peninsula. The government is taking a series of security measures to make it a safe investment environment.”

Abu Dhabi holds nine percent of the world’s proven oil reserves and almost five percent of the world’s natural gas. In 2010 oil production was 2.3 million barrels per day. The average GDP per capita is almost $50,000, which makes it ninth in the world.

The country is also trying to develop its tourism sector, with plans for an expanded airport and a proposed rail link between Abu Dhabi and Dubai.

But for motorists, the most important thing is to avoid the crushing traffic. Majid Al Kthairy, the head of traffic services at the municipality, estimates that some 7,000 vehicles travel through the center of the city each day. Now many of them will go through the tunnel.

Copyright © 2012 The Media Line. All Rights Reserved.

Issac John / 16 September 2011

DUBAI — The launch of the Gulf single currency, which had been delayed following the withdrawal of the UAE and Oman, is on track, Saudi Arabia’s Central Bank Governor Muhammad Al Jasser said.
Al Jasser said on the sidelines of a meeting of Arab central bank governors in Doha that the economic conditions in the Gulf are “excellent” for forming a monetary union and that a plan to launch a Gulf single currency was on track.

“There was no postponement, and I have said from the beginning that there will not be a specific date [for the single currency launch]… the economic situation in our countries is excellent and nothing is delaying the currency,” he was quoted as saying. The UAE and Oman have withdrawn from the Gulf single currency plan. The UAE abandoned the plan in May 2009 withdrawing in protest against placing the forerunner of the future joint central bank in Riyadh.

The Institute of International Finance, or IIF, has pointed out that a monetary union between the other four countries of the GCC would be delayed due to a lack of progress in putting institutional arrangements in place, the IIF said.

Although most of the technical and policy convergence criteria have been achieved, a monetary policy framework and a common system of payments and settlements are yet to be put in place, said the Washington-based institute.

According to economists, it is unlikely that a GCC currency will be active within the next few years.

Economists argue that the Gulf monetary union needs to establish monetary independence for member countries, all of which are pegged to the US dollar, except Kuwait. Al Jasser said the kingdom had no plans to revalue the riyal at this time.

The UAE and Saudi Arabian central bank governors said on Thursday that they were happy with current interest rate levels in their countries.

Sultan bin Nasser Al Suweidi, the UAE Central Bank Governor, said on the sidelines of the meeting that the current interest rates were good and there was no need to change them.

Al Jasser also said he was happy about the rates. The Saudi central bank has been keeping its repo rate at two per cent since January 2009 and the reverse repo rate at 0.25 per cent since June 2009.

Saudi Arabia’s currency is pegged to the US dollar, which limits the central bank’s scope to combat inflation because it needs to keep interest rates closely aligned with US benchmarks to avoid excessive pressures on the riyal. Al Jasser said that “everyone” was concerned over the fragile state of the US economy and Europe’s ongoing sovereign debt crisis. His comments did not provide a vote of confidence for the United States, nor for the eurozone, as he also said Saudi Arabia would not consider purchasing eurozone debt.

With the US dollar under pressure since Standard & Poor’s unprecedented US debt downgrade, speculation has also grown over whether GCC countries might consider revaluing their currencies. While Al Jasser drew attention to the fact that Saudi Arabia is not interested in incurring risk by buying eurozone debt, he didn’t address any Middle East exposure to the eurozone debt crisis via other ties.

Outside market watchers, however, can point to possible risks for the area. Arab countries hit by unrest may need to turn to financial support from international institutions such as the World Bank and the International Monetary Fund as growth slows in the region, central bank governors said.

“They [Arab central bank governors] expressed their fears from an expected drop in growth rates this year,” they said after the meeting. The central bank governors also said they would offer support to each other. “The governors expressed their support to all central banks in Arab countries that are witnessing political developments and transformations,” they said.

Source: Khaleej Times.

WAM & Reuters
September 11, 2011

UAE Foreign Minister Shaikh Abdullah Bin Zayed chairs Gulf bloc meeting

Jeddah: Foreign Ministers of the Gulf Cooperation Council (GCC) met here Sunday under the chairmanship of UAE Foreign Minister Shaikh Abdullah Bin Zayed Al Nahyan to discuss the latest developments in the regional, Arab and international arena.

Foreign ministers of Jordan and Morocco are attending the meeting for the first time.

Gulf Arab countries plan to fund a five-year development aid program for Morocco and Jordan, aspiring members of the Gulf Cooperation Council (GCC) political and economic bloc, and the amount will be set in December, the GCC’s chief said on Sunday.

Oil-exporting Gulf monarchies are seeking closer ties with Arab counterparts outside the Gulf to help contain pro-democracy unrest that is buffeting autocratic ruling elites throughout the Arab world, analysts say.

The six members of the GCC — Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman and Bahrain — said in May they would consider a request by the two Arab monarchies to join, but as yet few practical steps have been taken.

“There is a call for creating an economic development program for the two brotherly countries Jordan and Morocco,” GCC Secretary-General Abdullatif Al Zayani said after a Gulf foreign ministers meeting in Jeddah.

“A recommendation on the size (of the aid) will be made and a decision taken by the heads of states of the GCC at their next summit (in December),” Zayani said of the five-year program.

Within the bloc, the richer Gulf countries have offered $10 billion each in development funds to Bahrain and Oman, where protesters took to the streets this year demanding reforms.

Source: Gulf News.


RIYADH – The foreign ministers of Jordan and Morocco are to hold talks with their six-nation Gulf Cooperation Council counterparts on possible accession to the Gulf bloc, the GCC chief said on Thursday.

Abdulatif al-Zayani said in a statement the foreign ministers of Jordan and Morocco have been invited to discuss the “strengthening of relations and cooperation” on the sidelines of a GCC meeting on Sunday in Saudi Arabia.

The discussions in the port city of Jeddah would focus on implementing decisions taken at a May meeting of the GCC where the organization announced that both monarchies would be considered for membership of the bloc.

The oil-rich Arab states of the Gulf, which have seen entrenched regimes in Egypt and Tunisia fall, are seeking reliable allies in the region, singling out fellow monarchies.

Thousands of retired Jordanian army officers have obtained citizenship in the Gulf states and hold important positions in the region’s armed forces.

Source: Middle East Online.