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DUBAI — US shale drilling may be slowing, but not fast enough for the Organisation of Petroleum Exporting Countries (OPEC) to change policy at its June meeting or to prevent oil prices maybe falling more, in the view of the group's Gulf members.

Actual oil output from the United States could prove harder to beat back, sources in the Gulf say after poring over the latest data with top consultants.

The message is, do not underestimate the ability of the oil industry to adapt: there can be cost cuts, restructuring and consolidation and that would take time, the sources said.

"These two years, 2015-16, are still a discovery, everybody is talking about the economics of tight oil but nobody is talking with certainty... you have to wait and see," said a source from a Gulf OPEC producer.

At its last meeting in November, OPEC kingpin Saudi Arabia persuaded fellow members to keep production unchanged, accelerating the sharp oil price drop to a low around $45.

Oil Minister Ali Al Naimi has made it clear Riyadh will not cut output to prop up oil markets at the cost of market share.

OPEC will have no choice but to hold its course, Kuwait's oil minister said on Thursday, reiterating the view from the Gulf Arab state that the group is likely to keep things as they are in June.

The number of drilling rigs in the United States has fallen steeply in recent months and production growth slowed, although many US producers argue that lower prices will bring efficiency gains and output will not fall so steeply.

The Gulf OPEC side believes the wait may stretch into 2016, but analysts say low prices are a potent force.

"Lower prices work. They undermine supply growth and spur demand. Yes, year-on-year there is still a lot of growth in US oil output but month-on-month it has stopped," said Gary Ross, executive chairman and founder of New York oil consultancy PIRA.

"You have got to give it time and I believe the Saudis will be prepared to wait until the price magic works. And it will work," he added. 

Resilient shale 

OPEC has said it believes global oversupply amounting to as much as 1.5 million barrels per day will evaporate as demand picks up and US production could start to take a hit by late 2015.

However, should US oil producers prove more resilient, oversupply could persist and even grow more if Western powers and Tehran reach a nuclear deal this year that may eventually allow Iran to increase its oil exports.

Despite the reduction in oil-directed rigs by over 40 per cent since hitting a record high of 1,609 in October, there are few signs US production has slowed.

"Despite the big drop in the rig count, we should continue to see US supply growth for another few months," said Yasser Elguindi from economic consultants Medley Global Advisors.

"Many companies have began to reposition rigs away from higher cost, less productive areas, into areas where they know they will have lower costs and higher productivity. Not everyone has that option, but those that can, are doing this," he added.

The rig count is an indicator but it is not a decisive one, said another Gulf OPEC delegate: "We thought that there will be a lot of impact on the shale but it seems that the companies are still managing."

On Friday, the International Energy Agency (IEA) said steep drops in the US rig count have been a key driver of the recent price rebound, which saw Brent crude rising to $60 per barrel.

But the IEA said the United States may soon run out of spare capacity to store crude, which would put additional downward pressure on prices and that US supply "continues to defy expectations".

Gulf OPEC members were caught out by the scale of the oil price collapse.

They thought that prices would fall to $70 or even $60 a barrel and that alone was enough to slow production of high cost producers and gradually push prices higher in the second half of 2015, OPEC delegates and watchers say.

But some OPEC sources remain doubtful. They say that prices may have to drop to $40 a barrel and stay there for as long as three years to have a real impact on the unconventional oil production from North America and absorb the oversupply in the market.

"It is not because prices went down for a month or two that we will see an impact on tight oil. We are still in the same swing, up and down," said another OPEC source.

TEHRAN — Iran has approved its budget for the next fiscal year with oil accounting for just a quarter of revenue after a global fall in crude prices, local media said Tuesday.

The text was approved Monday by the Guardians Council and sent to parliament, just days before the March 21 deadline, the Iranian New Year. The final budget is around 8,500 trillion riyals ($297 billion, 280 billion euros) according to Tasnim news agency, which published the outline of the text without providing details on oil revenues.

"The weight of oil in the budget has dropped significantly and now reaches 25 per cent while it was 50 per cent over the last three years," parliament speaker Ali Larijani indicated Monday.

He added that the budget was "disconnected" to oil prices. Larijani noted that the oil price per barrel was calculated at a minimum of $40, against a government forecast in December of $72 per barrel.

If prices rise above $40 per barrel in the second half of the year, the surplus revenue would be invested in infrastructure projects, he said. Iran's oil ministry said crude has averaged $44 a barrel since the start of the year.

KUWAIT CITY — Corporate earnings in the energy-rich Gulf states rose 10 per cent last year, for the first time surpassing their highest level before the global financial crisis, a report said on Tuesday.

Net profits of the 658 listed companies on the seven bourses of the Gulf Cooperation Council (GCC) states reached $68 billion in 2014 compared with $61.7 billion the previous year, investment firm Kuwait Financial Centre (Markaz) said in a report.

It was the first time Gulf corporate earnings had surpassed $63.2 billion, which was recorded in 2007 a year before the financial crisis hit. The six-nation GCC consists of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab Emirates (UAE).

Markaz projected that GCC companies' earnings will rise by 5.5 per cent to $71.2 billion in 2015. Banks, financial services and real estate sectors accounted for most of the increase in profits which were dragged down by a 10 per cent decline in the telecommunications sector's earnings, Markaz said.

The UAE led with the highest growth in corporate profits, recording a 32 per cent rise, followed by Bahrain with 11 per cent and Kuwait at 8 per cent. 

PARIS — Cheap oil and money have lifted the eurozone out of lethargy, the Organisation for Economic Cooperation and Development (OECD) said Wednesday, but it warned investment was lacking to achieve rapid world growth and expressed concerns about China.

“Growth prospects in the major economies look slightly better” than when it made its previous forecasts in November, the OECD said.

It raised its forecast for global growth this year by a tenth of a percentage point to 4 per cent and its outlook for 2016 by two tenths of a percentage point to 4.3 per cent.

Nevertheless, the OECD indicated that “the near-term outlook remains for moderate, rather than rapid, world gross domestic product growth”, pointing out that “real investment remains sluggish, and labour is not yet fully engaged”.

The OECD, a policy analysis body made up of 34 countries with advanced economies, said the effects of “lower oil prices and the effects of monetary policy easing are driving the overall improvement in the outlook”.

Nowhere was this more evident than in the eurozone, where the OECD raised its 2015 growth forecast by 0.3 points to 1.4 per cent this year and by the same magnitude to 2 per cent in 2016.

The European Central Bank’s (ECB) launching of a 1.14 euro ($1.2 billion) bond buying programme this month was the main reason for the improvement in the outlook in the eurozone, it said.

The OECD noted that monetary conditions have been eased in recent months in countries accounting for roughly half of the global economy, which it said has helped improve financial conditions.

With the Federal Reserve (Fed) meeting on Wednesday and economists on the lookout for signals that it could begin raising interest rates within months, the OECD said it should wait. 

“Lower oil prices and the appreciation of the dollar make it appropriate for the Federal Reserve to wait longer to raise policy interest rates,” said the OECD.

The dollar has been quickly rising in value as the Fed nears raising interest rates and the ECB has eased monetary policy, which could slow US exports and growth. 

The OECD held its forecasts for US growth steady at 3.1 per cent this year and 3 per cent in 2016.

India heads the pack 

Meanwhile, growth is “getting back on track” in Japan, said the OECD, which lifted its 2015 forecast by 0.2 points to 1 per cent growth and the 2016 outlook by 0.4 points to 1.4 per cent.

While lower fuel prices mean it will take longer to return to safe inflation levels, it will support demand, added the OECD as it pointed to higher wages as being a key part to a sustainable recovery.

“A key requirement for reaching a new equilibrium with satisfactory demand growth and inflation close to the official target is a significant rise in average nominal wages, making the upcoming annual wage bargaining round a critical period,” indicated the OECD, which also urged further structural reforms.

The OECD said China’s growth is slowing to the government’s target of 7 per cent, as it trimmed its forecast by 0.1 point to that level while the 2016 outlook was left untouched.

“Policy makers face a significant challenge between meeting growth targets while also pursuing the stated goal of rebalancing the economy toward domestic demand and at the same time ensuring that financial risks are managed,” it warned.

Meanwhile, the OECD now expects India to overtake China as the fastest-growing major economy, hiking its forecast by 1.7 points to 7.7 per cent growth in 2015, although part of the change was due to new data. The 2016 forecast was raised to 8 per cent.

Commodity exporters, like Canada and Brazil, saw their growth outlooks cut as oil prices have fallen. 

Brazil’s forecast was chopped by 2 points to a contraction of 0.5 per cent this year, as a tight monetary policy has also crimped growth.

Despite growing risks of ultra-low interest rates laying the groundwork for a new crisis, the OECD said central banks should continue their easy money policies although governments need to act to ensure the recoveries are balanced and create jobs.

“... the failure of monetary easing alone to spur strong growth in fixed investment, with instead booms in financial investments, imply that policy makers cannot rely exclusively on monetary policy,” the OECD concluded.

AQABA — Saraya Aqaba Real Estate Development Company announced in a press statement this week that, during an extraordinary general assembly meeting, shareholders approved restructuring the board of directors by reducing the number from nine to five; three of whom representing Saraya Jordan, one representing the Social Security Corporation, and one representing Aqaba Development Corporation.

“Accordingly, Saraya Aqaba’s Chairman Ali Hassan Kolaghassi and the board members announced their resignations paving the way for the appointment of a new board of directors,” the press release said.

Kolaghassi confirmed his continued support to Saraya Aqaba as a founding shareholder and the vice chairman for Saraya Holdings, the owner of Saraya Jordan and the biggest shareholder at Saraya Aqaba.

Highlighting Saraya Aqaba’s unique status as a debt-free company since its establishment, he noted that Saraya Aqaba increased its capital from JD100,000 in 2005 to JD797,266,780 in 2015.

Kolaghassi also mentioned signing a $629 million contract with a joint venture to complete the first phase of the remaining works, which includes four international hotels in addition to Souk Saraya, a beach club, offices, conferencecentre, Wild Wadi Water Park, part of the residential units, infrastructure works, services building and staff residences.

AMMAN — A delegation from the Jordanian Businessmen Association (JBA) has recently concluded a working visit to Oman, during which the delegates held talks to enhance economic and commercial relations between the two countries, JBA announced Tuesday.

The delegation, headed by JBA President Hamdi Tabbaa, met with Omani Ministry of Commerce and Industry Undersecretary Ahmad Mimani and Chairman of Oman Chamber of Commerce and Industry Said Kiyumi and discussed ways to increase trade exchange volume.

Tabbaa also called on Omani businessmen to benefit from Jordan’s geographical location to enter North African markets, adding that Oman is also a gateway for Jordanian exports to enter countries in the Indian Ocean region.

On the sidelines of the visit, JBA and the Omani chamber of commerce and industry signed a memorandum of understanding to further boost relations between the two institutions and enhance economic and commercial relations.

PARIS — North African cities are leading the way as the continent and its growing middle class lay down “solid economic roots” which are very appealing to investors, according to a new report published Tuesday.

The report highlighted 20 African “cities of opportunity” with the Egyptian capital Cairo heading the list, with Tunis, Casablanca and Algiers also in the top five.

Coming in third place only Johannesburg, the largest city in South Africa, breaks northern Africa’s monopoly of the top five cities as ranked in the report by accountancy firm PricewaterhouseCoopers (PwC).

“The preponderance of North African cities at the top is mainly due to the length of time they have been established. This has given them time to develop infrastructure, regulatory and legal frameworks as well as establishing socio-cultural ecosystems,” the report indicated.

Johannesburg, formed more recently in 1886, “was developed rapidly for political reasons,” allowing it develop infrastructure and services are comparable to the more established African cities.

“With five per cent growth, dynamic demographics and a growing middle class, Africa is exceptionally appealing to investors,” said the PwC report, launched Tuesday at the Africa CEO Forum 2015 in Geneva.

‘Historic crossroads’ 

Africa is at “an exceptional, historic crossroads, if there was ever a moment for an entire continent to seize the day, this is it,” it added.

In choosing its 20 “cities of opportunity”, limited in the report to one city per country, the researchers considered four main indicators: economy, infrastructure, human capital and demographics.

Along with technical advances and demographic change, a major trend identified by the report was urbanisation.

“By 2030, half of Africa’s population will live in cities which are where economic activity and growth will be focused as well as becoming communication centres and a hub for social trends,” the report indicated. 

PwC’s Africa Business Group Leader Paul Cleal said the study should help answer the questions of potential investors in the continent and help city politicians and officials improve their competitiveness.

Cairo’s infrastructure was particularly praised, while Tunis ranked top in the “human capital” category, which included health systems, graduate numbers and literacy and numeracy.

The report also looked at other criteria such as the gross domestic product growth, ease of doing business and the ability to attract foreign direct investment.

In this list, Dar Es Salaam, Lusaka, Nairobi, Lagos and Accra polled well.

“Most of the African cities with promise can [and will] climb to join those cities at the top of our overall ranking, with a little effort and organisation,” the report said.

“Moreover, many of them have already become key regional platforms such as Dar es Salaam and Douala as ports, Accra for telecommunications, Lagos for culture and Nairobi for financial services,” it pointed out

But the report also said Africa still has “fundamental problems”.

These challenges ranged from “disease [whether AIDS, Ebola, or river blindness] to internecine conflict” as well as a decline in commodity prices down to the most basic requirements of urban infrastructure, clean water, ample electricity, public transport.

The complete top 20 list of Africa’s “cities of opportunity” was: Cairo, Tunis, Johannesburg, Casablanca, Algeria, Accra, Nairobi, Lagos, Addis Ababa, kampala, Dakar, Abidjan, Kigali, Lusaka, Dar es Salaam, Douala, Antananarivo, Maputo, Kinshasa and Luanda.

STOCKHOLM — China has eased ahead of Germany and France to become the world’s number three arms exporter after the United States and Russia, a Stockholm-based think tank said Monday.

The volume of the multibillion-dollar world arms trade rose 16 per cent during the period 2010 to 2014 over the previous five years, the Stockholm International Peace Research Institute (SIPRI) indicated in its annual report.

The figures show that “the United States has taken a firm lead” with 31 per cent of global exports of conventional weapons, SIPRI pointed out, with Russia in second place at 27 per cent.

The next three arms exporters are far behind with about 5 per cent each, and China is only slightly ahead of fourth-ranked Germany and fifth-ranked France.

Three Asian countries accounted for more than two-thirds of Chinese exports, with Pakistan buying 41 per cent of the total, followed by Bangladesh and Myanmar. Beijing also had 18 client nations in Africa during the period.

Russia’s top client was India, the world’s leading arms importer, with 70 per cent of its purchases coming from Russia.

The United States had the most diverse clientele. South Korea, its top client, accounted for only 9 per cent of total US business.

Among leading suppliers, China’s sales were up 143 per cent compared to the previous five-year period. Ukraine and Russia also saw surges in exports, while those of Germany and France declined.

“China is always prudent and responsible in arms exports,” foreign ministry spokesman Hong Lei told reporters.

“We insist on the principles that it [arms exports] should be conducive to the legitimate self-defence capability of the recipient country, not impair international and regional peace and stability, and not interfere in the domestic affairs of other countries,” he said.

The data reflect the volume of arms deliveries, not the financial value of the deals, SIPRI notes.

Among importers, India was far ahead of second- and third-placed Saudi Arabia and China, purchasing some 15 per cent of the total volume, despite ranking 9th in terms of military budgets, compared with 5 per cent each for the next two.

According to the latest SIPRI figures, the US retains the world’s largest military budget at $640 billion (608 billion euros), far ahead of China ($188 billion) and Russia ($87.8 billion).

African arms imports shot up 45 per cent in the period, SIPRI found. 

“Algeria was the largest arms importer in Africa, followed by Morocco, whose arms imports increased 11-fold,” it indicated. “Cameroon and Nigeria received arms from several states in order to fulfil their urgent demand for weapons to fight against the militant Islamist group Boko Haram.” 

While the arms trade has been on the rise for the past decade, the volume remains about one-third below its post-war peak reached in the early 1980s.

KUWAIT CITY — Kuwait has sought help from the International Monetary Fund (IMF) to introduce corporate taxes in a bid to diversify revenue in the face of falling oil prices, a minister said Monday.

“The IMF will prepare a preliminary report on how to impose taxes on companies in Kuwait,” Commerce and Industry Minister Abdul Mohsen Al Mudej said after a meeting with IMF representatives, the official KUNA news agency reported.

The two sides discussed ways of introducing corporate taxes for Kuwaiti and foreign companies operating in the oil-rich Gulf state after the recent introduction of a new corporate law, the minister added.

Kuwait currently imposes no taxes on local companies, Kuwaiti citizens and expatriates but it requires foreign firms to pay 15 per cent tax on their profits.

The IMF has in the past advised Kuwait to subject local companies to corporate tax as part of a series of measures aimed at boosting non-oil revenues and cutting spending.

Kuwait has posted a budget surplus in each of the past 15 fiscal years due to high oil prices but has also increased public spending from under $13 billion (12.4 billion euros) to more than $77 billion this fiscal year, mostly on wages and subsidies.

Earlier this year, the emirate stopped diesel, kerosene and aviation fuel subsidies and the finance ministry is considering similar measures for petrol, electricity and water.

Oil income contributed around 94 per cent of Kuwait’s public revenues but the sharp drop in prices is expected to substantially reduce its income.

Kuwait’s revenues in the first 10 months of the current fiscal year dropped 16 per cent to $74.5 billion compared to $88.8 billion last year, according to finance ministry figures.

In the same period, oil income dived 17.3 per cent to $68.3 billion from $82.5 billion.

The emirate is however forecast to end this fiscal year with a surplus, albeit smaller than usual, for the 16th year in a row.

The government has announced the 2015/2016 budget with a $24 billion deficit despite slashing spending by 17.8 per cent to $65.1 billion.

There are about 1.25 million Kuwaitis in the tiny gulf kingdom, in addition to 2.9 million foreigners. It pumps about 2.8 million barrels of oil per day.

Last month, Kuwait’s parliament approved a five-year development plan that envisages spending of 34.15 billion dinars ($116 billion/103 billion euros) on projects despite a sharp drop in oil prices.

The vote on the plan, which starts in April and ends March 2020, was 33-4, with one abstention.

State Minister for Planning and Development Hind Al Sabeeh said the plan is part of Kuwait’s efforts to become a regional trade and financial hub by 2035.

The plan aims to boost gross domestic product, increasing the private sector share in the economy and raising the number of Kuwaitis in the private sector, the minister added.

The private sectors share of the economy is projected to increase from 26.4 per cent at present to 41.9 per cent, Higher Planning Council officials told MPs during the debate.

Among projects envisioned is the construction of 45,000 housing units, a metro system, a railway network and a large number of mega oil projects, including a new refinery.

The plan also aims at increasing the number of Kuwaiti employees in the private sector from 92,000 to 137,000 at the end of the plan. The number of foreign workers in the sector is around 1.2 million.

Several MPs criticised the government for failing to implement the previous five-year plan, and others expressed doubts over its capability to implement the new one.

“The projects listed in the plan are fantastic and look like a sweet dream,” independent MP Abdul Hameed Dashti said. “But it is not possible to implement them because the government administration is weak.”

Shiite MP Faisal Al Duwaisan demanded that all ministers resign if they fail to implement the plan.

The government proposed the plan despite the sharp drop in the price of oil, which contributed about 94 per cent of Kuwait’s revenues over the past 16 fiscal years and which all ended in the black.

The government, which has enormous cash reserves, has insisted that the fall in revenues will not affect spending on projects.

LONDON — British Finance Minister George Osborne offered a sweetener to pensioners on Sunday, less than two months before a national election, but promised there would be no big giveaways for voters when he sets out his final pre-vote budget.

With many opinion polls showing the governing Conservatives neck-and-neck with the opposition Labour Party, Osborne will be looking for a chance to boost his party's re-election prospects at his annual budget statement on Wednesday.

While his hopes of delivering major tax cuts have been frustrated by slow progress in bringing down Britain's budget deficit, Osborne has been given some room for manoeuvre by a sharp fall in inflation that has lowered the cost of interest payments on some government bonds and welfare payments.

In a move which may help win support from older voters, Osborne said in a statement on Sunday pensioners would be given the freedom to cash in their annuities in exchange for lump sums, an extension of pension reforms announced last year.

But in an interview on BBC TV, Osborne also reiterated there would be "no giveaways, no gimmicks" in his budget.

"Everything we do in this budget has to be paid for," he said. "This country is still borrowing too much, and so we have to go on making difficult decisions."

Among other measures expected on Wednesday are tax breaks for the North Sea oil and gas industry, which is struggling to cope with the plunge in global oil prices.

Osborne may use some of his inflation savings windfall to reduce the scale of planned austerity in the next five years, potentially dampening Labour's line of attack that the Conservatives plan ideologically driven cuts to the state.

Britain's independent budget office has said a pledge by Osborne last year to achieve a 23 billion pound surplus by 2019/20, would take public spending as a share of the economy to its lowest level in 80 years.

Asked about the £23 billion number on Sunday, Osborne declined to repeat his previous forecast but said: "We have set out our plans and we intend to fulfil our plans."

Labour finance spokesman Ed Balls said Osborne wanted to go "way beyond the difficult task of balancing the books.

"The difference is a big ideological plan for a surplus ... from the Tories [Conservatives] or a sensible, balanced, fair plan from Labour," he told the BBC.   

Separately, the Organisation for Economic Cooperation and Development (OECD) said Britain should continue to cut its budget deficit after May's national election, and might need to rethink plans to shield healthcare and schools spending.

With May 7 shaping up to be one of the closest and most unpredictable elections in modern British history, all main parties have promised to maintain spending on schools and health. But the Paris-based think tank said this might impose unacceptably high cuts in other areas.

"[Britain should] continue to pursue the medium-term fiscal consolidation path... and ensure consolidation efforts are fair," the OECD said in a report.

Labour plans to balance the government's books, excluding investment spending, within the next parliament. The Conservatives say it intends to balance the budget completely and return a small surplus.

The OECD cited research suggesting that protecting areas such as health and education from spending cuts would imply average spending cuts elsewhere, in real terms, of almost 40 per cent between the financial years 2010-11 and 2019-20.

"Hence, the composition of fiscal adjustment should be reviewed to ease pressure on public services that have already contributed to consolidation," the OECD report said.

Other think tanks have disagreed with the austere approach of the current government.

Earlier this month, a review of the government's record by the National Institute of Social and Economic Research concluded that austerity had been an unnecessary risk that had caused significant damage to the economy.

The OECD predicted Britain's economy would grow 2.6 per cent this year, slightly above the 2.4 per cent forecast by the government's independent fiscal watchdog, the Office for Budget Responsibility.

But the OECD said Britain needed more private-sector infrastructure spending to deliver the rise in productivity that was necessary to make the economic recovery sustainable.