Business

BAGHDAD — Iraq's federal government and the Kurdistan autonomous region signed an accord Tuesday to allow Kurdish oil exports to resume through Turkey after they were halted 10 days earlier. 

The agreement, signed in Baghdad in the presence of Prime Minister Mohamed Shia Al Sudani and Kurdish premier Masrour Barzani, was to be implemented "today", a Kurdish regional government official told AFP.

The deal was described as temporary but signals the end of independent oil exports by northern Iraq's Kurdish regional government and marks a clear limit to its autonomy.

The agreement comes two days after Iraq, Saudi Arabia and several other major oil exporters announced a sharp reduction in their production from May that sent up global energy prices.

Barzani said on Twitter that the deal is "temporary" until Iraq's parliament agrees a new oil and gas law, but he called it "a crucial step towards ending the long-standing dispute" between Arbil and Baghdad.

Ankara had stopped handling Iraqi Kurdish oil last month after an international tribunal ruled in a nine-year-old dispute that Baghdad was right to insist on overseeing all Iraqi oil exports.

Oil exports are the key revenue source for both the federal and regional governments and their management has long been a sensitive topic in relations.

The government of war-scarred Iraq is betting on earning around $70 per barrel in its budget calculations for the next three years and has been irritated to see the autonomous region go it alone by exporting its oil via Turkey.

The Kurdistan government sees Baghdad as trying to profit from the region's resources while dragging its feet on paying the salaries of Kurdish civil servants and other funds for its regional public sector.

'Breakthrough deal' 

Gulf Analyst Yesar Al-Maleki, of the Middle East Economic Survey (MEES), said the deal aimed "first and foremost" at quickly re-starting exports to Turkey.

"But it also presents an opportunity for Baghdad to finally be involved in Iraqi Kurdistan's oil sector" and should also allow Kurdistan "to accrue higher revenues" in future.

Maleki hailed the deal as a "breakthrough for the two PMs" that could help both sides draft the new energy law and "resolve the existing historic disputes once and for all".

Sales of Kurdistan crude will be managed from now by the State Oil Marketing Organisation, a federal government official and a Kurdish official told AFP.

A joint committee formed by the federal and regional governments will supervise the export process, they added.

Revenues will be paid into an account under the control of the Kurdish government which will be overseen by Baghdad, they said.

The halt to exports through a pipeline to the Turkish Mediterranean port of Ceyhan had left foreign oil firms with nowhere to pump Kurdish oil.

Norway's DNO, one of the main firms operating in Iraqi Kurdistan, announced it was halting production at its wells.

Prior to Ankara's action on March 25, the autonomous region was exporting roughly 450,000 barrels per day of crude.

Iraq, the second largest producer within the Organisation of the Petroleum Exporting Countries, exports an average of 3.3 million bpd.

RIYADH — Major oil powers led by Saudi Arabia announced a surprise production cut of more than 1 million barrels per day on Sunday, calling it a "precautionary" move aimed at stabilising the market.

The reductions, on top of a Russian decision to extend a cut of 500,000 barrels per day, and despite US calls to increase production, risk stoking inflation and pressure to raise interest rates.

Cuts by Saudi Arabia, Iraq, the UAE, Kuwait, Algeria and Oman from May to the end of the year will top one million barrels per day — the biggest reduction since the OPEC+ cartel slashed two million barrels per day in October.

Russia, a leading member of the OPEC+ cartel, said it was also extending an existing cut of 500,000 bpd to the end of this year, describing it as "a responsible and preventive action".

Oil prices soared almost 6 per cent in Asian trade on Monday morning with West Texas Intermediate jumping by 5.74 per cent to $80.01 a barrel and Brent climbing 5.67 per cent to $84.42.

A Saudi energy ministry official "emphasised that this is a precautionary measure aimed at supporting the stability of the oil market", the official Saudi Press Agency said.

The cuts follow a drop in oil prices triggered by jitters over the banking sector, following the collapse of US lender SVB and UBS's hurried buy-out of troubled rival Credit Suisse, UAE-based oil expert Ibrahim Al Ghitani told AFP.

Brent crude oil prices, trading just below $80 a barrel late last week, should bounce to above $80 as a result of the reductions, he said, calling prices below $80 "unacceptable" for OPEC+.

"The producing countries adhere to a balancing level that supports their large financial budget this year, and their next economic plans," Al Ghitani said.

'Recessionary pressures' 

The reductions follow a controversial decision in October by OPEC and its allies including Russia — collectively known as OPEC+ — to slash production by two million barrels per day.

That cut, the biggest since the height of the COVID pandemic in 2020, also came despite concerns it would fuel further inflation and push central banks to hike interest rates.

OPEC raised its 2023 world oil demand forecast in February, saying it expected demand to grow by 2.3 million barrels per day to an average of 101.87 million barrels per day this year.

But "initial expectations of higher demand in the second half are now challenged by the prospects of continued high inflation and recessionary pressures", said Gulf analyst Yesar Al Maleki.

"OPEC is taking a pre-emptive measure in case demand reduction in the second half is possibly higher," he told AFP.

Saudi Arabia will cut 500,000 barrels per day, Iraq 211,000, the UAE 144,000, Kuwait 128,000, Algeria 48,000 and Oman 40,000, each country announced.

The reductions ignore calls from the United States to raise production as consumption rises and as China, the world's biggest oil consumer, reopens after its COVID shutdown.

"As world economies recover, we'll see more consumption. And therefore we'd like to see supply meet demand," said Jose Fernandez, the US undersecretary of state for economic affairs, Energy and the environment, on the sidelines of the CERAWeek energy conference, in Houston, Texas, last month.

On Monday, OPEC+ — the 13 members of the Organisation of the Petroleum Exporting Countries and 11 non-OPEC allied countries — will hold a Joint Ministerial Monitoring Committee meeting by video-link.

US President Joe Biden has regularly called for an increase in the OPEC+ output since Russia's invasion of Ukraine early last year sent prices soaring to above $120 a barrel. 

After the cut in October, which preceded US mid-term elections, he warned of "consequences" for Saudi Arabia, a long-standing ally.

LONDON — UK passport office workers launched a five-week stoppage Monday, the latest walkout in strike-hit Britain as the country reels from the worst cost of living crisis in a generation.

The Public and Commercial Services union (PCS) accused the government of failing to deal even-handedly with public sector workers.

The UK has been hit by a wave of industrial action across the economy in recent months ranging from ambulance staff and rail staff to doctors, teachers and dock workers.

Unions say their members have been hit by a combination of decades-high inflation and stagnating wages that has left them struggling to pay their bills.

Ministers had failed to "hold any meaningful talks" with civil servants despite negotiations having been opened with unions representing health workers and teachers, PCS General-Secretary Mark Serwotka said.

"They're treating their own workforce worse than anyone else. They've had six months to resolve this dispute but for six months have refused to improve their 2 per cent imposed pay rise, and failed to address our members' other issues of concern," he said.

"They seem to think if they ignore our members, they'll go away. But how can our members ignore the cost-of-living crisis when 40,000 civil servants are using foodbanks and 45,000 of them are claiming the benefits they administer themselves?" he added.

The union wants talks about pay, jobs, pensions and conditions.

More than 1,000 members of the PCS civil servants union are due to take part in the walkout with picket lines mounted outside eight sites.

A nationwide walkout of more than 130,000 civil servants is also planned for April 28.

Prime Minister Rishi Sunak has rejected demands for big pay hikes in the public sector, saying they are unaffordable and will fuel inflation.

The UK government and teaching unions earlier this month agreed to hold "intensive talks" a day after health unions said they had reached a deal on pay.

But teacher union leaders said on Monday that they rejected the latest pay offer and announced further walkouts.

The government had offered teachers a £1,000 ($1,231) one-off payment for the current school year and an average rise of 4.5 per cent pay rise for next year.

But National Education Union (NEU) members in England voted to turn down the deal and to strike on April 27 and May 2.

"The offer shows an astounding lack of judgment and understanding of the desperate situation in the education system," said Mary Bousted and Kevin Courtney, joint general secretaries of the NEU.

ROME — Italy said on Friday it was temporarily blocking ChatGPT over data privacy concerns, becoming the first western country to take such action against the popular artificial intelligence (AI) chatbot.

The country's Data Protection Authority said US firm OpenAI, which makes ChatGPT, had no legal basis to justify "the mass collection and storage of personal data for the purpose of 'training' the algorithms underlying the operation of the platform".

ChatGPT caused a global sensation when it was released last year for its ability to generate essays, songs, exams and even news articles from brief prompts.

But critics have long fretted that it was unclear where ChatGPT and its competitors got their data or how they processed it.

Universities and some education authorities have banned the chatbot over fears that students could use it to write essays or cheat in exams.

And hundreds of experts and industry figures signed an open letter this week calling for a pause in the development of powerful AI systems, arguing they posed "profound risks to society and humanity".

The letter was prompted by OpenAI's release earlier this month of GPT-4, a more powerful version of its chatbot, with even less transparency about its data sources.

OpenAI said on Friday that it has "disabled ChatGPT for users in Italy".

"We are committed to protecting people's privacy and we believe we comply with... privacy laws. We actively work to reduce personal data in training our AI systems like ChatGPT because we want our AI to learn about the world, not about private individuals," an OpenAI spokesperson said.

"We also believe that AI regulation is necessary — so we look forward to working closely with [authorities in Italy] and educating them on how our systems are built and used," the spokesperson said.

"Our users in Italy have told us they find ChatGPT helpful for everyday tasks and we look forward to making it available again soon."

'Unsuitable answers' 

The Italian authority imposed a "temporary limitation of the processing of Italian user data" by OpenAI and said it had launched an investigation. 

As well as a lack of legal basis for data collection, the authority also highlighted a lack of clarity over whose data was being collected.

It said wrong answers given by the chatbot suggested data was not being handled properly, and accused the firm of exposing children to "absolutely unsuitable answers".

The watchdog further referenced a data breach on March 20 where user conversations and payment information were compromised — a problem the firm blamed on a bug.

Nello Cristianini, an AI academic from Bath university in Britain, said securing user data and enforcing age limits were easy to fix.

But the other two accusations were more problematic — that the model is trained on personal data that is gathered without consent and then not treated properly.

"It is not clear how these can be fixed anytime soon," he said.

The company has been given 20 days to respond and could face a fine of 20 million euros ($21.7 million) or up to 4 per cent of annual revenue.

The runaway success of ChatGPT garnered OpenAI a multibillion-dollar deal with Microsoft, which uses the technology in its Bing search engine and other programs.

It also sparked a gold rush among other tech firms and venture capitalists, with Google hurrying out its own chatbot and investors pouring cash into all manner of AI projects.

AMMAN — Chief Executive Officer of Amman Stock Exchange (ASE) Mazen Wathaifi said that 95.2 per cent out of 169 listed companies have provided the ASE with their audited annual financial statements for the period ended 31/12/2022 during the specified period in the Directives of Listing Securities ended on 31/3/2023, through the e-disclosure System XBRL. 

This high percentage reflects the compliance of listed companies with the laws and regulations, and the compliance of such companies with the principles of transparency and disclosure, said a statement posted on the ASE website.

The profits after tax attributed to shareholders for the public shareholding companies listed on ASE that provided the stock exchange with its financial statements amounted to JD2421.9 million, compared with JD1305.9 million for the same companies of year 2021, an increase of 85.5 per cent.

These profits are unprecedented historically by these companies. The profits before tax amounted to JD3348.6 million for the year 2022, compared with JD1815.3 million for the year 2021, which represents an increase of 84.5 per cent.

At the sector level, the profits after tax attributed to shareholders of companies for the industrial sector amounted to JD1347.5 million for the year 2022 compared with JD576.8 million for the year 2021, which represents an increase of 133.6 per cent. 

As for services sector these profits amounted to JD241.9 million for the year 2022, compared with JD117.7 million for the year 2021, an increase of 105.6 per cent. And for the financial sector the profits showed a value of JD832.6 million for the year 2022 compared with JD611.5 million for the year 2021, an increase of 36.2 per cent.

Wathaifi added that all listed companies on the ASE should provide their audited annual financial statements within the specified period, according to the Directives for Listing Securities on the ASE.

Wathaifi said that the ASE posts these financial statements on the ASE website under Circulars and Disclosures/annual reports window.

He added that four companies namely, the Arab Assurers Insurance, Winter Valley Tourism Investment, Afaq for Energy and Afaq Holding for Investment & Real Estate Development have failed to provide the ASE with their audited annual financial statements for the period ended on 31/12/2022 during the specified period.

Accordingly, the ASE suspended their shares from trading as of Sunday 02/04/2023. The trading in these company’s shares will remain suspended until they provide the ASE with the required financial statements.

Wathaifi also indicated that the ASE will continue suspending the trading in shares of Al Aanabel International for Islamic Investments (holding) and transport & investment barter company, for failing to provide the ASE with their previous financial statements, in addition to the annual financial statements for the period ended 31/12/2022, noting that the shares of these companies shall continue to be available for trading in the unlisted securities market.  

With regard to the companies that were granted a period to comply with listing conditions in the second market, Wathaifi mentioned that two companies namely Arab Union International Insurance Company and International Brokerage & Financial Markets have failed to provide the ASE with their audited annual financial statements for the year 2022  within the specified period.

Accordingly, the ASE will suspend and delist the shares of Arab Union International Insurance Company from the ASE, and shall be allowed for trading at the over-the-counter (OTC) market.

Also, the ASE will delist the shares of international brokerage and financial markets, and continue its trading at the OTC market, by virtue of the provisions of Article (17/a/5) of the directives for listing securities. 

AMMAN — Huawei released its 2022 annual report on Friday which indicates steady operations throughout 2022. The company generated $92.37 billion in revenue and $5.12 billion in net profits. 

Huawei continues to strengthen investment in research and development (R&D), with an annual expenditure of $23.22 billion in 2022, representing 25.1 per cent of the company's annual revenue and bringing its total R&D expenditure over the past 10 years to more than $140.55 billion, according to a Huawei statement. 

Eric Xu, Huawei's rotating chairman, said at the annual report conference: "In 2022, a challenging external environment and non-market factors continued to take a toll on Huawei's operations."

"In the midst of this storm, we kept racing ahead, doing everything in our power to maintain business continuity and serve our customers. 

We also went to great lengths to grow the harvest — generating a steady stream of revenue to sustain our survival and lay the groundwork for future development," he said. 

Sabrina Meng, Huawei's CFO, said: "Despite substantial pressure in 2022, our overall business results were in line with forecast. At the end of 2022, our liability ratio was 58.9 per cent and our net cash balance was $25.35 billion. In addition, our balance of total assets reached $0.15 trillion, largely composed of current assets such as cash, short-term investments, and operating assets. Our financial position remains solid, with strong resilience and flexibility. In 2022, our total R&D spending was CNY 23.22 billion, representing 25.1 per cent of our total revenue."

In 2022, revenue from Huawei's carrier, enterprise and consumer businesses amounted to $40.84 billion, $19.15 billion, and $30.84 billion, respectively.

"2023 will be crucial to Huawei's sustainable survival and development," Xu noted. 

LONDON — The UK economy performed slightly better than thought in the final quarter of last year, revised data showed on Friday, but analysts warned of recession risks as inflation remains sky high.

The Office for National Statistics (ONS) said the economy grew 0.1 per cent in the October-December period after an initial estimate showing flat output.

Either way, the UK narrowly avoided falling into recession at the end of 2022 despite a cost-of-living crisis.

"The economy performed a little more strongly... than previously estimated, with later data showing telecommunications, construction and manufacturing all faring better than initially thought," noted ONS director of economic statistics, Darren Morgan.

He added that households saved more in the last quarter, with finances boosted by government support to pay sky-high energy bills.

"Meanwhile, the UK's balance of payments deficit with the rest of the world narrowed, driven by increased foreign earnings by UK companies, particularly in the energy sector," he added.

Oil and gas prices soared last year as supplies tightened following the invasion of Ukraine by key energy producer Russia.

That largely contributed to inflation soaring worldwide in 2022, with UK consumer prices reaching a four-decade high above 11 per cent.

After dipping at the end of last year and start of 2023, British inflation rose back to 10.4 per cent in February.

Recession in 2023? 

"The final quarter GDP data suggested the economy was even more resilient in 2022 than we previously thought, as the government absorbed some of the hit to households from high inflation," Ruth Gregory, deputy chief UK economist at Capital Economics, said following Friday's data. 

"But we still think that about two-thirds of the drag of higher interest rates has yet to be felt and that the economy will slip into a recession involving a peak to trough fall of about 1 per cent this year." 

Other economists believe the UK will avoid recession in 2023, matching a prediction from the government.

The Bank of England (BoE), which has aggressively raised its interest rate several times over more than a year in a bid to cool inflation, has expressed hope the UK will swerve recession, which refers to at least two quarters of contraction in a row.

Separate data Friday from major mortgage provider Nationwide showed UK house prices slid 3.1 per cent year-on-year in March, as BoE interest-rate hikes took their toll.

That was the biggest decline since 2009 when the global financial crisis was still in full flow.

Retail lenders tend to match the central bank's increases to borrowing costs, resulting in higher repayments on home loans.

Pay rises 

With inflation still elevated, Britain on Friday said its minimum wage would jump by a record 9.7 per cent from Saturday.

April also sees the country's state pension leap by a record amount, at more than 10 per cent.

It comes as Britain continues to face mass strike action by thousands of public and private sector workers battling for pay rises that match the surge in inflation.

The latest walkout Friday saw the start of a 10-day strike by about 1,400 security guards at Heathrow airport, forcing the cancellation of several flights to and from London's main hub.