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LONDON — Iraqi state oil firm SOMO and Iraq's semi-autonomous region of Kurdistan have begun jointly exporting crude oil from the giant Kirkuk oilfield again after cutting a preliminary deal on revenue-sharing, trading sources said on Thursday.

The development signals a breakthrough in relations between Baghdad and Erbil, which have been disputing how to share oil and budget revenues for several years amid fiscal problems on both sides and their fight against the terror group, Daesh, militants.

The Kirkuk flows, usually amounting to 150,000 barrels per day and exported via the Turkish Mediterranean port of Ceyhan, had been suspended since March as Baghdad pushed Kurdistan to cut a new deal.

Before March, Kirkuk flows were unilaterally handled by Kurdistan. SOMO, the State Oil Marketing Organisation, had seen no cargoes exported on its behalf from Ceyhan since mid-2015, when Kurdistan began independent sales of its own crude and Kirkuk oil.

"Shipments on behalf of SOMO have resumed as of six o'clock this morning... While final details of the revenue-sharing deal are still being worked out, the current flows of Kirkuk are being split 50/50 between SOMO and Kurdistan," one shipping source familiar with the operations said.

Besides Kirkuk, Kurdistan produces around 500,000 barrels per day of crude from its own fields and those will still be marketed independently by the semi-autonomous region.

But the compromise over Kirkuk could be the first step towards a comprehensive deal involving all Kurdish oil.

Baghdad has insisted SOMO is the only entity that can market Iraqi crude. Kurdistan started independent exports after accusing Baghdad of not respecting a previous revenue-sharing deal and not transferring enough money from the federal budget.

Baghdad, which exports most of its oil from the Gulf, has said Erbil was not exporting enough crude under that deal.

Kurdistan urgently needed Kirkuk flows to resume because its own exports do not cover its budget needs, forcing the region to borrow billions of dollars from Turkey, oil firms and trading houses guaranteed by future oil sales.

Lost revenues from the halt in Kirkuk flows had been estimated at more than $1 billion since March.

Last week, Baghdad said that if a new revenue deal were not reached, oil from Kirkuk could be exported by truck via Iran. This week, SOMO blacklisted three ships involved in exporting Kurdish oil.

However, a meeting between Iraqi Prime Minister Haider Al Abadi and Nechirvan Barzani, prime minister of the Kurdistan regional government, seems to have broken the ice this week with a preliminary deal reached on Kirkuk oil.

The trading source said final details on how to split the Kirkuk flows could be worked out by mid-September.

Ezat Sabir, head of the Finance Committee in the Kurdish Council of Ministers, said his understanding was that the 50/50 split of Kirkuk oil would remain until the year-end, after which Baghdad and Erbil would try to return to full revenue-sharing.

Erbil has said it was ready to hand over all oil exports to SOMO if Baghdad agreed to transfer $1 billion to Erbil from the federal budget each month.

DOHA — Fly economy class, share an office, cancel journal subscriptions: these are some of the requests being put to government employees in Qatar, as low energy prices force austerity even among the world's wealthiest citizens.

With huge offshore gas reserves, a small population and billions of dollars of foreign assets, Qatar has weathered the global oil price slump since mid-2014 better than many of its Gulf Arab neighbours.

But the decline in state energy income comes at a time when Doha is pursuing a $200 billion infrastructure upgrade for the 2022 soccer World Cup and building ports and hospitals, squeezing finances and leading to budget cuts.

The foreign workers who make up the bulk of Qatar's 2.3 million population have borne the brunt of cutbacks; thousands have lost their jobs as the government has sought to shield its citizens from the impact of austerity.

But the world's top liquefied natural gas exporter faces a $12.8 billion budget deficit this year, its first deficit in over a decade, and has halved its forecasts for economic growth.

Now even the 300,000 citizens of the world's richest nation per citizen are feeling the pinch in a shake-up of state entities, which employ about nine out of 10 Qatari workers.

"Your responsibility in light of the falling oil prices is bigger," Qatar's Emir Sheikh Tamim said in a November speech that warned against "waste and extravagance", and said the state could no longer "provide for everything" as the country diversifies its economy away from oil and gas.

The austerity measures may be light compared with those felt by expatriate workers and poorer energy-producing countries, but they have nevertheless unnerved some locals for whom affluence and stellar economic growth have been the norm.

A merger of several ministries early this year did not affect the salaries or benefits of Qataris — which are still viewed as sacrosanct — but did entail sharp cuts in "discretionary" spending, according to three government ministry officials.

"We stopped receiving a daily paper," said one of the officials, who said colleagues had been encouraged not to fly business class and to cut back on trips abroad for overseas conferences.

"Journal subscriptions were cancelled. Some who had their own offices were moved into shared offices."

The economy, finance and labour ministries did not respond to requests for comment.

Overseas travel

Another official, from the labour ministry, said as a result of the merger hundreds of Qatari government employees had been left with no work since January as the government scrambled to find them new positions while continuing to pay their salaries.

Staff in the labour ministry were told that travelling abroad for further education while working for the government — an appealing aspect of the job for many Qataris — was now limited to those pursuing technical or vocational degrees, the official said.

He and the other officials declined to be named as they are not authorised to speak publicly.

Qatari authorities say the oil price slump provides an opportunity to curb the excesses of government agencies that have been plagued by inefficiencies for years.

An economic adviser to the government, who also asked to remain anonymous as he is not authorised to speak publicly, said there was a freeze on recruitment in some government departments and more scrutiny on spending. He said reducing inefficiencies, while painful, would benefit the state in the long run, even once oil prices rebounded.

Many Qataris are drawn to public-sector positions which typically involve more favourable working hours and better salaries and benefits than private companies.

It is not yet clear how successful the efficiency drive has been, although in the 2016 budget "minor capital expenditure", an area of discretionary spending that traditionally includes smaller building projects such as refurbishments, fell by 70 per cent year-on-year.

Salaries account for 50 billion riyals ($13.7 billion) — about a quarter — of Qatar's expenditure.

Previous austerity steps in Qatar, such as utility bill increases in late 2015 and a reduction in fuel subsidies earlier this year, have fallen hardest on poorly paid foreign construction workers — as will a 5 per cent sales tax on consumer goods and services planned for 2018.

This trend risks increasingly polarising the country between wealthy Qataris at the top and Asian blue-collar workers at the bottom.

However; Syed Bashar, a former economist with Qatar's central bank, said Qatari workers could increasingly feel the weight of austerity as the government targets state entities to narrow the deficit.

"The government will not be able to provide the vast majority of Qatari jobs indefinitely," he added. "Nor can it guarantee that salaries keep rising as they did. This will be upsetting for some nationals."

KARACHI — Chinese multinational Shanghai Electric is set to buy the utility serving Pakistan's biggest city of Karachi, in a $1.6 billion deal that will be the biggest private-sector acquisition in the country's history.

China is stepping up investment in its South Asian neighbour as part of a $46 billion project unveiled last year that will link its western Xinjiang province to Pakistan's Gwadar port with a series of infrastructure, power and transport upgrades.

"We have received the public announcement of intention for acquisition of up to 66.4 per cent of the shares of K-Electric Limited by Shanghai Electric Limited," a Pakistan Stock Exchange notification said.

The Karachi Electric Corporation, set up in 1913 as a public sector company, was sold to Saudi Arabia's Aljomaih Group in 2005, who in turn sold it to the UAE's Abraaj Capital.

"Chinese interest is tremendous in Pakistan and the new deal would be quite attractive to strengthen cooperation under CPEC," said Taha Javed, director of research at Alfalah Securities, referring to the China-Pakistan Economic Corridor.

"It is the largest ever private-sector acquisition in Pakistan," said analyst Zeeshan Afzal, executive director at Insight Securities.

Pakistan suffers from major power shortages that sap economic growth. Analysts hope the Chinese acquisition can improve the utility's efficiency and reduce blackouts.

BANGKOK — Predominately Buddhist Thailand has opened its first halal hotel as hopes to attract more Muslim visitors and boost one of the few bright spots in its economy.

Nearly 30 million foreign tourists came to Thailand last year, but only about 658,000 were from the Middle East, according to industry data.

The four-star Al Meroz hotel in Bangkok, which opened in November, hopes to play its part in changing that, and to cash in.

“There are 1.6 billion Muslims in the world. It’s a huge market,” said the hotel’s general manager, Sanya Saengboon.

“Just 1 per cent of that market is enough for us to thrive.”

The Al Meroz, which boasts mosque-like architecture, has two prayer rooms and three halal dining halls.

Rooms cost from 4,000 baht all the way up to 50,000 baht ($116 to $1,445) a night, said Sanya.

A guest at the hotel, Aamir Fazal, 28, a security officer from Australia, said access to a halal hotel was a comfort to Muslim travellers in Thailand where halal food can be hard to find.

“It’s a really nice experience. It’s the first halal hotel here and I find that amazing,” said Fazal.

Eager to tap into a growing Muslim tourist market, Thailand launched a mobile application last year which helps tourists search for halal eateries and Muslim-friendly attractions.

Parts of Thailand’s south, near the border with Muslim Malaysia, are mainly Muslims.

Many Malaysians pop over the border for short visits but a low-level separatist insurgency in the far south, that has included bomb attacks in border towns frequented by Malaysian tourists, has dented business there.

A series of bomb attacks in more mainstream tourist towns south of Bangkok this month, in which four people were killed and dozens wounded, has led to fears the insurgency is spreading.

Thailand saw a 10 per cent increase in arrivals from the Middle East in 2015 compared with 2014, data from the Department of Tourism showed.

AMMAN — The central budget supplement received $2.667 billion in 2015, accounting for around 37 per cent of last year’s total grants and aid, according to the Planning Ministry, the Jordan News Agency, Petra, reported.

The energy sector received 11 per cent while both the health sector and the water and sewerage sectors received nearly 10 per cent each, according the ministry’s figures.

Other sectors including education, transport, infrastructure services, investment promotion and tourism also received different shares of the total amount of aid and grants. 

BRUSSELS — The European Commission on Monday insisted talks on a huge US free trade agreement were on track, rejecting German claims that irreconcilable differences had left the deal dead in the water.

"The ball is rolling right now. The commission is making steady progress," commission spokesman Margaritis Schinas said when asked about comments by German Vice Chancellor and Economy Minister Sigmar Gabriel that the talks had "failed".

"Talks are now indeed entering a crucial stage but... provided the conditions are right, the commission stands ready to close this deal by the end of the year," Schinas told a regular press briefing.

The EU and US began work on the Transatlantic Trade and Investment Partnership (TTIP) in 2013, aiming to create the world's largest free trade area by the time President Barack Obama leaves office in January next year.

But the talks have got bogged down amid widespread suspicion in the 28-nation EU that a deal would undercut the bloc's standards in key areas such as health and welfare.

As the US presidential vote nears and with the French and Germans heading to the polls in 2017, Gabriel is only the latest high-ranking European to cast doubt on a swift deal.

France's Prime Minister Manuel Valls has said it would be "impossible" for the two sides to conclude negotiations on a trade deal by the end of 2016.

‘Dancing on eggshells’ 

On Sunday, the vice chancellor told German television that "the talks with the US have de facto failed because we Europeans of course must not succumb to American demands... Nothing is moving forward”.

Germany's governing left-right coalition is divided over TTIP.

The centre-left Social Democratic Party (SPD) led by Gabriel is increasingly sceptical, while Chancellor Angela Merkel and her conservative Christian Democratic Union (CDU) remain largely in favour.

Gabriel is "dancing on eggshells between his roles as Social Democratic Party leader and economy minister", CDU General Secretary Peter Tauber said on Monday.

Industry groups also repudiated the SPD leader's words.

"TTIP can't be sacrificed to the election campaign that's beginning," said Matthias Wissmann, head of the powerful German Automotive Industry Association.

Merkel's spokesman Steffen Seibert confirmed the chancellor's continued support for a deal, telling a Berlin press conference that "it's right to keep negotiating".

Keen to disarm TTIP as an electoral weapon, the commission, the EU's executive arm which conducts all bloc trade negotiations, said a deal would not come at any cost.

Commission President Jean-Claude Juncker has made clear "the commission will not sacrifice Europe's social health and its data protection standards, nor its cultural diversity on the altar of free trade," spokesman Schinas said.

Asked whether TTIP could go through without support from Germany, the EU's paymaster and largest economy, he said Juncker had won fresh backing for the negotiations from all bloc leaders at a summit in July.

"At the last [summit], precisely because we were entering this difficult and complex stage, President Juncker addressed his counterparts, checking whether there was political backing to conclude the deal by the end of the year," Schinas said.

"We did not feel that there was a lack of support... we received the mandate to conclude these negotiations."

LONDON — The head of EDF Energy has urged the British government to approve the Hinkley Point C nuclear power project, an explicit appeal by the French energy giant ahead of a decision due within weeks.

Prime Minister Theresa May intervened last month to delay the £18 billion ($24 billion) project, just hours after it was approved by EDF’s board, former Cabinet colleague Vince Cable said.

The government says it will make a final decision in the early autumn. Cable said May was concerned about China’s involvement, particularly in terms of national security.

The state-owned China General Nuclear Power Corp. (CGN) is EDF’s partner in building the two new reactors at Hinkley Point, southwest England, which would provide about 7 per cent of Britain’s electricity.

EDF Energy Chief Executive Vincent de Rivaz said the Chinese, who will provide £6 billion of funding, were a trusted partner with whom the French had worked building two nuclear reactors in China.

“[The Hinckley Point project] brings the benefits of a 30-year partnership between EDF and CGN in nuclear construction in China, a country with the largest civil nuclear programme in the world,” he wrote in the Sunday Telegraph.

“We know and trust our Chinese partners.”

Addressing security concerns, he said all staff on nuclear projects were rigorously vetted and the control systems at Hinkley Point would be isolated from IT systems and the internet.

EDF and its partners have agreed to fund the new stations, and in return Britain has committed to paying a minimum price for the power generated for 35 years. Critics say the price, around double current market levels, is too high.

But de Rivaz said it was fair.

“Hinkley Point C is competitive with all other future energy options, even including fossil fuels like gas when the cost of carbon is taken into account,” he said.

AMMAN — Exports dropped by 7.3 per cent during the first half of the year to around JD2.506 billion, compared with the figure recorded in the same period last year, according to Department of Statistics (DoS) figures.  

Imports also slipped by 1.1 per cent to JD7.006 billion, compared to JD7.086 billion in the first half of last year. 

Subsequently, the trade balance deficit went up by 2.7 per cent, amounting to around JD4.5 billion.

The DoS monthly report on foreign trade also showed that national exports were down by 9.6 per cent as they went down to around JD2.105 billion from around JD2.328 billion, according to a DoS statement.

Re-exports rose by 6.5 per cent to JD401.5 million, up from JD376.9 million, the DoS added. 

Pharmaceutical products and crude phosphate exports rose by 18.6 per cent and 2.7 per cent, respectively, while the country’s exports of garments, fruit and vegetables, raw potash and fertilisers went down, the DoS figures revealed. 

As for the country’s principal commercial partners, exports to the North American Free Trade Agreement countries saw a noticeable rise, mainly to the US.

AMMAN — Jordan Investment Commission (JIC) and Middle East Payment Services (MEPS) signed a partnership agreement on Sunday under which MEPS will provide JIC with point-of-sale (POS) devices that allow investors to use Visa or Master Card to pay for JIC’s services online.

JIC President Thabet Al Wir, who signed the partnership agreement with MEPS CEO Khaled Zakaria, said JIC seeks to provide the best investment services to businessmen.

The agreement is in line with the government's directives to streamline investment procedures, especially when in terms of e-payments, he added, according to a JIC statement. 

BAGHDAD — Iraq's government would consider selling crude through Iran should talks with the autonomous Kurdish region on an oil revenue-sharing agreement fail, a senior oil ministry official in Baghdad told Reuters.

Iraq's State Oil Marketing Organisation (SOMO) plans to hold talks with the Kurdish Regional Government (KRG), possibly next week, about Iraqi oil exported through Turkey, Deputy Oil Minister Fayadh Al Nema said in an interview on Friday evening.

"If the negotiations come to a close" without an agreement "we will start to find a way in order to sell our oil because we need money, either to Iran or other countries", he said by telephone.

Iraq, OPEC's second-largest producer after Saudi Arabia, depends on oil sales for 95 per cent of its public income. Its economy is reeling under the double impact of low oil prices and the war against Daesh militants.

The Kurdistan region produces around 500,000 barrels per day (bpd) on its territory and exports those volumes via Turkey. Baghdad would not be able to reroute those volumes to Iran but could order shipments of some 150,000bpd via Iran that are being produced in the nearby province of Kirkuk.

An agreement between Iran and Iraq could function in a similar fashion as oil-swap deals Tehran has had with Caspian Sea nations, according to an oil official who asked not to be identified.

Iran would import Iraqi oil to its refineries and export an equivalent amount of its own crude on behalf of Baghdad from Iranian ports on the Gulf. Iraq has ports on the Gulf, but they are not linked to the northern Kirkuk fields by pipeline.

Iraq's state-run North Oil Company resumed pumping crude through the Kurdish-controlled pipeline to Turkey last week as "a sign of goodwill to invite them [the Kurds] to start negotiations", Nema said.

He said pumping had resumed on the instruction of Prime Minister Haider Al Abadi following "some understanding" between Baghdad and Erbil. Abadi said on Tuesday the decision had been made to avoid damage to reservoirs.

The flow of crude extracted from Kirkuk by North Oil and pumped in the pipeline has been running at about 75,000bpd since last week, or half the rate before it was halted in March, Nema said.

Should there be an agreement with the Kurds, flow through the pipeline would be increased to more than 100,000bpd, not to the previous level of 150,000bpd, he added.

Nema said about 20,000bpd would be supplied to the refinery of Suleimaniya, in the Kurdish region, and 30,000bpd would be refined locally in Kirkuk.

The pipeline carries crude to the Mediterranean Port of Ceyhan, where the Kurds have been selling it independently on the international market, along with oil produced in their northern region.

The Kurdish government has been calling on Baghdad since March to resume the pumping of Kirkuk crude in full to help Erbil fund its war against Daesh. Sources in Erbil have said splitting the Kirkuk flows would divide the Kurds and complicate the task of fighting the ultra-hardline militants.

A KRG spokesman in June told Reuters the Kurds are ready to strike an agreement with Baghdad if it guarantees them monthly revenue of $1 billion, more than double what they make currently from selling their own oil.

The dispute revolves around Kurdish oil exports that Baghdad wants to bring under its control.

"If Baghdad comes and says ‘OK, give me all the oil that you have and I'll give you the 17 per cent as per the budget,’ which equals to 1 billion, I think, logically it should be the thing to accept," KRG spokesman Safeen Dizayee said in June.

"Whether this oil goes to the international market or first to Baghdad and then to the market, it doesn't make any difference," he added. "We are ready to enter dialogue with Baghdad."

The Kurdish government stopped delivering crude oil to the central government about a year ago, a decision taken when Baghdad's payment fell under $400 million a month, Dizayee said.

It is also in a dispute with the central government over Kirkuk, where North Oil produces its crude and which the Kurds claim as part of their territory. The Kurds took control of the region two years ago, after the Iraqi army disintegrated when the terror group, Daesh, overran a third of the country.