Business

SINGAPORE/BEIJING — Iraq is selling more crude oil to its biggest customer, China's Unipec, people familiar with the matter say, digging a deeper foothold in the global supply market just before production cuts agreed with OPEC and other producers are scheduled to kick in.

With new deals with Indian and US refiners also coming on stream, the expanded contract with the trading arm of Asia's largest refiner Sinopec means Baghdad will have to reduce supply to other clients to honour its commitment to cut output by 210,000 barrels per day (bpd) from 2017.

Three people with knowledge of the matter said the Unipec contract was signed just before the Organisation of the Petroleum Exporting Countries (OPEC), of which Iraq is a member, agreed with other producers led by Russia to cut output by as much as 1.8 million bpd in an effort to reduce a global fuel supply overhang and prop up prices.

Speaking on condition of anonymity because they were not authorised to speak to media, the people said Iraq's Oil Marketing Company (SOMO) has boosted Basra crude forward export sales to Unipec by 3 per cent to a total of 40 million-60 million barrels each quarter — 435,000-652,000 bpd -—for 2017.

"If Iraq increases its sales to China while others have to cut back or just hold their volumes steady, Iraq will inevitably gain market share in what is arguably the most important oil market," said a trader who specialises in sending crude to China but is not allowed to speak publicly.

Iraq is OPEC's second-biggest producer behind Saudi Arabia and now ranks third among crude suppliers to China — after Russia and Saudi Arabia — having recorded a 15 per cent year-on-year jump to about 723,000 bpd between January and October.

As part of the expanded Chinese deal, one of the people said, Unipec is expected to load 2 million barrels of Basra Heavy crude every quarter.

"Basra is now an established grade with stable quality and reliable supplies," said another trader, who buys Iraqi crude but isn't authorised to speak to the media.

Unipec said it doesn't comment on specific deals.

SOMO will also supply Basra Heavy crude under new term contracts to Exxon Mobil, Chevron Corp. and Indian refiner Essar Oil for 2017, according to a person close to the matter and a preliminary January loading schedule for the oil.

The contracts contribute to an expected jump in Basra exports to 3.53 million bpd in January 2017, the highest volume since June, the loading schedule showed.

SOMO did not reply to an e-mail from Reuters seeking comment. Exxon and Chevron said they don't comment on operational matters, and Essar declined to comment.

In India, crude imports from Iraq rose 24 per cent in the first 10 months this year to 784,000 bpd, making Iraq the second-largest crude supplier after Saudi Arabia.

Iraqi crude exports to the United States have more than doubled in the first nine months of 2016 from the same period a year ago to nearly 350,000 bpd as Venezuelan supplies declined, data from the Energy Information Administration showed.

AMMAN — Deputy Prime Minister for Economic Affairs and Minister of State for Investment Affairs Jawad Anani and Jordanian Businessmen Association (JBA) President Hamdi Tabbaa examined on Saturday ways to boost the country’s economic cooperation with Oman, according to a JBA statement.

At a meeting with Deputy Prime Minister of Oman Fahd Bin Mahmoud Al Said in Muscat, the two sides called for further joint investment projects and commercial exchange.

The meeting was held on the sideline of the participation of a Jordanian delegation in the 5th Arab-Indian Partnership Conference that was held in Muscat in the presence of around 350 Arab and Indian businessmen, in addition to many officials and ambassadors, the Jordan News Agency, Petra, reported.

Tabbaa, who is also president of the Federation of Arab Businessmen, headed the Jordanian delegation of business people to the conference. At the opening session, Tabbaa underscored the current  importance of India as a major investor in the Arab region as well as a commercial partner. 

Yahoo Inc. shares fell almost 5 per cent on Thursday after the technology company disclosed a second massive data breach that raised fears Verizon might kill a deal to buy its core Internet business.

Silicon Valley-based Yahoo said late on Wednesday that it had uncovered a 2013 cyber attack that compromised data of more than 1 billion user accounts, the largest breach in history.

That followed Yahoo's disclosure in September of a separate breach that affected over 500 million accounts, which the company said it believed was launched by different hackers.

Yahoo shares were down 4.8 per cent at $38.93 in midday trade as the latest revelation cast new doubt on whether Verizon Communications Inc. would proceed with a $4.83 billion agreement to buy Yahoo's core Internet business, struck in July.

Verizon is now seeking to persuade Yahoo to amend the terms of the acquisition agreement to reflect the economic impact of the data breaches, according to people familiar with the matter.

The telecommunications giant has threatened to go to court to get out of the deal, citing a material adverse effect if the deal does not reprice, said the sources, who asked not to be identified because the negotiations are confidential.

Verizon had already said in October it was reviewing the deal after September's breach disclosure. Late on Wednesday, it publicly said it would "review the impact of this new development before reaching any final conclusions" about whether to proceed.

The company declined to comment beyond that statement on Thursday.

Verizon shares rose 0.6 per cent to $51.95, in line with the performance of the S&P 500 Index.

The latest breach attack has drawn widespread criticism of Yahoo from security experts, several of whom have advised consumers to close their Yahoo accounts.

"Yahoo has fallen down on security in so many ways I have to recommend that if you have an active Yahoo e-mail account, either direct with Yahoo of via a partner like AT&T, get rid of it," Stu Sjouwerman, chief executive of cyber security firm KnowBe4 Inc., said in a broadly distributed e-mail.

AMMAN — December 15 marks Royal Jordanian (RJ) Airlines’ 53rd anniversary. On that day in 1963, the company launched its operations as the national carrier of Jordan and has since been an ambassador of goodwill and friendship to other cultures, and a bridge that facilitates tourism and trade with the world.

RJ has been receiving the Hashemite support since its establishment. 

King Hussein’s constant backing played a key role in the airline’s progress and helped it boost its competitiveness at regional and international levels.

Also, His Majesty King Abdullah continues to support RJ.

RJ President & CEO Suleiman Obeidat expressed the airline’s appreciation of the government for its care and commitment to maintaining RJ as Jordan’s carrier, highlighting its contribution to the national economy and its support of the tourism sector, besides cultural activities for 53 years now.

He stressed the airline’s determination to improve its overall performance and increase its efficiency and productivity, eventually leading to profitability, which will help the company develop and overcome all challenges.

RJ has all that is required to be successful, said Obeidat, adding that the airlines will keep improving its services, facilitating travel procedures and developing employees’ skills by training them according to the best customer-service standards, in addition to reinforcing its technologies.

RJ introduced five 787s into the fleet at the end of 2014 and another one last November, he said, adding that it will introduce a seventh aircraft at the beginning of 2017, as part of the strategic plan to modernise the long-haul fleet.

The airline fleet also has modern Airbus and Embraer aircraft. Today’s RJ fleet age has an average of five years, which puts the airline on par with international carriers.

There are 15 codeshare agreements between RJ and regional and international airlines: American Airlines, Air Berlin, British Airways, Iberia, Siberia Airlines, Malaysia Airlines, Sri Lankan Airlines, Turkish Airlines, Oman Air, Middle East Airlines, Tarom, Qatar Airways, Gulf Air, Syrian Air and Meridiana Fly Airlines. These agreements contribute to supplying RJ with more passengers.

Obeidat stressed the importance the airlines attaches to the human factor, noting that RJ invests in its staff through on-going training.

DOHA — Oil companies in Qatar and Kuwait on Tuesday announced that they will reduce production levels from the beginning of the year.

The reduction — beginning on January 1 — follows the recent decisions by OPEC and non-OPEC oil-producing countries to cap output.

“We have started advising our customers of the expected reductions in oil deliveries to ensure the state’s compliance with OPEC’s allocations,” said a statement from Saad Sherida Al Kaabi, president and chief executive of state-owned Qatar Petroleum.

“This decision comes in line with the state of Qatar’s commitment to the recently agreed production levels by the members of OPEC during its ministerial meeting held on 30 November, 2016.”

No further details about production levels were given in the statement.

National oil conglomerate Kuwait Petroleum Corp. (KPC) also said on Tuesday it has informed its clients that their export quantities will be reduced, starting in January.

KPC said this was part of the Gulf state’s commitment under the OPEC deal last month.

It did not provide any details of the quantities to be reduced, but local media said Kuwait’s share is around 130,000 barrels per day out of its daily output of 3 million bpd.

UAE’s ADNOC had announced on Saturday that it was also “committed to meeting new OPEC terms”, adding on Twitter that it will “work closely with customers on revised allocations for January”.

ADNOC produces more than 3.15 million bpd.

On November 30, Qatar, Kuwait and the United Arab Emirates were among the OPEC countries which agreed to reduce output by 1.2 million bpd.

This was followed earlier this month by non-OPEC oil producing countries agreeing a cut of 558,000bpd. 

AMMAN — The World Bank Group, through its Trade and Competitiveness Global  Practice, has supported the Jordan Investment Commission (JIC) in launching its e-investment portal and incentives inventory, according to a recent JIC statement.

The e-investment portal will help the JIC improve its services and interactions with the private sector, with a focus on attracting investment, increasing transparency and improving business regulations, JIC said.

It will facilitate investors’ access to information about private investment opportunities in Jordan and the services offered by JIC, including the Investment Single Window, which serves as a one stop shop for business registration. It will also include an inventory of investment incentives that will help JIC enhance transparency  about the tax, customs and financial incentives offered by different government agencies in Jordan, it added. 

NEW YORK — Oil prices surged to their highest level since mid-2015 on Monday after the world's top crude producers agreed to the first joint output cut since 2001, sparking concerns about inflation which pushed up US treasury yields to a more than two-year peak.

Yields also gained ahead of a two-day policy meeting of the Federal Reserve that starts on Tuesday, which is expected to raise interest rates for the only the second time since the global financial crisis.

Following the weekend agreement between OPEC and key non-OPEC states that set the markets alive, Brent crude futures were up $1.97 at $56.30 per barrel, having hit a session peak of $57.89, the highest since July 2015. US crude futures were up $1.97 at $53.47 a barrel.

"The original OPEC deal pointed to a fairly lumpy 3 per cent cut [in production], so this suggests there is a bit more upside for oil prices," said Neil Williams, chief economist at fund manager Hermes.

There was particular surprise as Saudi Arabia, the world's number one producer, said it may cut its output even more than it had first suggested at an Organisation of Petroleum Exporting Countries meeting just over a week ago.

Energy shares jumped, helping to lift the Dow Jones industrial average and S&P 500 to record intraday highs in early trading, extending their recent string of records.

"This market has gone up without taking a breather and will enter a cautious trading day as it awaits the Fed," said Peter Cardillo, the chief market economist at First Standard Financial in New York.

Benchmark US bond yields topped 2.5 per cent for the first time since October 2014, with analysts saying the OPEC agreement boosted reflation expectations.

"We have the Fed decision coming up on Wednesday, and people are unsure whether they should buy the dip here," said interest rate strategist Gennadiy Goldberg of TD Securities in New York.

In late morning trading, US 10-year note prices were down 8/32, while the yield rose to 2.493 per cent from 2.464 per cent late on Friday. Earlier Monday, the yield struck 2.528 per cent, its highest since September 29, 2014, according to Reuters data.

In the currency markets, the dollar fell against most major currencies on concerns the Fed could suggest in an upcoming policy statement that the greenback's gains had gone too far.

Also, a rally in oil prices boosted commodity-linked currencies.

The dollar index, which measures the greenback against a basket of six major currencies, was last down 0.45 per cent at 101.130, easing from an earlier 1-1/2-week high of 101.780.

The dollar was last down 0.4 per cent against the Canadian dollar at C$1.3122 after hitting C$1.3108, its lowest level against the Canadian dollar since October 20.
Overnight, Chinese stocks suffered their biggest fall in six months as blue chips were knocked by fresh regulatory curbs to rein in insurers' aggressive stock investments and rising bond yields prompted profit-taking in equities.

The blue-chip CSI300 index fell 2.4 per cent, to 3,409.18 points, while the Shanghai Composite Index lost 2.5 per cent to 3,152.97 points.

China's insurance regulator, which recently warned it would curb "barbaric" acquisitions by insurers, said late on Friday it had suspended the insurance arm of China's Evergrande Group from conducting stock market investment.

Concerns were also rumbling about US-Sino relations after Donald Trump re-ignited controversy over Taiwan.

AMMAN — The Jordanian-Qatari business forum opened in Doha on Monday, hosting businesspeople, investors and representatives of the private sector from both countries, the Jordan News Agency, Petra, reported. 

During the forum, Jordan showcased investment opportunities worth around $1.36 billion. 

The Jordanian delegation was chaired by Jordan Chamber of Commerce President Nael Kabariti, who said that the Kingdom exerts all efforts to improve policies and legislation regulating business, showcasing investment opportunities to Arab and Gulf investors, especially the Qataris. 

Qatar Chamber of Commerce Chairman Sheikh Khalifa Bin Jassim Al Thani welcomed the Jordanian delegates and said that international economic conditions are witnessing accelerating political changes, which he said require Arab countries to focus on economic and trade cooperation among each other. 

He highlighted the importance of discussing the means to reform and utilise the best economic capabilities and available opportunities to achieve sustainable development.

Sheikh Khalifa also showcased the opportunities available to Jordanian investors and businesspeople in Qatar, especially in the field of infrastructure.

For his part, Jordan Investment Commission Secretary General Mikhled Omari highlighted the investment climate in Jordan, noting that Jordan's stability and security factors are major advantages.

The investment opportunities Omari showcased, which amount to $1.36 billion, include an $80 million tram project in Irbid, the $50 million Bus Rapid Transit project between Amman and Zarqa, a $60 million electricity generation station and a $60 million water plant, in addition to a $300 million project to generate energy from solid waste.

KUWAIT CITY — Kuwait's Emir Sheikh Sabah Al Ahmad Al Sabah opened the new parliament on Sunday by declaring that a reduction in public spending is "inevitable" in the face of weak oil prices.

The emir said the sharp drop in oil revenues has resulted in a huge budget deficit and "there is no other option but to take effective measures to deal with it".

"I am confident that parliament and my brother citizens are all aware that reducing public expenditure is inevitable through well-studied measures," he said.

He, however, said that those measures should spare low income people and take into consideration social justice.

OPEC member Kuwait, which sits on around 7 per cent of the world's proven crude reserves, has sought to cut spending and boost non-oil revenues in a bid to diversify its economy.

But the measures, which included raising electricity and fuel prices, triggered a political crisis that led the ruler to dissolve the previous parliament in October and call for snap polls.

In the November 26 polls, the opposition which vowed to reject austerity measures won nearly half of the 50 seats.

Most of the other candidates also opposed the measures.

Before crude prices began to slide in mid-2014, Kuwait generated about 95 per cent of its income from oil. 

But the country's oil revenues dropped from a massive $97 billion in the 2013-2014 fiscal year to just $40 billion in the last financial year, which ended on March 31, according to finance ministry figures.

And oil income is projected to slide further to around $35 billion this fiscal year.

In 2015-2016, the OPEC state posted its first budget deficit, of $15 billion, in 16 years. It is projecting a shortfall of $29 billion this year.

During its run of surpluses, Kuwait amassed reserves worth $600 billion invested mostly abroad.

Kuwait has been providing a generous cradle-to-grave welfare system to its nationals, who make up 30 per cent of its population of 4.4 million. 

"I would not have liked to ask you any day to drop anything of the welfare [you have been getting]," the emir said in his speech.

To plug a growing budget shortfall, the Gulf state has started borrowing for the first time in two decades.

Parliament on Sunday reelected pro-government Marzouk Al-Ghanem as its speaker for a new four-year term and pro-government MP Issa Al Kundari as his deputy, in a blow to opposition candidates.

The Islamist-led opposition controls nearly half of the 50-member parliament while 15 unelected Cabinet ministers out of a 16-strong lineup become members of the national assembly and can vote.