Business

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.

TUNIS — If Tunisia does not overcome its economic difficulties, an austerity programme will be inevitable next year with thousands of public sector job cuts and new taxes, prime minister-designate Youssef Chahed told parliament on Friday.

Chahed has promised his new government will take tough decisions to help growth in the economy and create jobs with the North African country under pressure from international lenders to push through economic reforms and trim public spending.

Lawmakers were meeting on Friday to vote whether to approve Chahed's new government — a broad coalition of secular, Islamist and leftist parties, independents and trade union allies which he believes can deliver on economic reforms.

"If the situation continues like this then in 2017, we will need a policy of austerity, and dismiss thousands of public sector employees and impose new taxes," Chahed told lawmakers before the vote.

Chahed, an ally of President Beji Caid Essebsi, promised a tough line on the economy. But critics question whether he has the political clout to overcome the labour union opposition and party infighting that have dogged past governments.

He said growth this year would not surpass 1.5 per cent, below the official target of 2.5 per cent for the year.

Tunisia is struggling with lower tourism revenues after two militant attacks on foreign tourists last year hit what is one of its key industries. Strikes and protests for jobs have also hurt state phosphate production, another key revenue earner for the state.

CAIRO — Egypt cannot afford to keep its museums open let alone search for ancient buried treasures because of the economic crisis, the antiquities minister says.

Tourism, a mainstay of the economy, has been hit hard since the 2011 revolution that overthrew veteran ruler Hosni Mubarak, with many of Egypt's renowned historical sites, from the pyramids at Giza to the Valley of the Kings in Luxor, suffering a decline in foreign visitors.

"We have over 20 museums that have been closed down since the January 25 Revolution and we do not have the resources to run them," Khaled Al Anani told Reuters in an interview.

His ministry is meant to be self-sufficient and not supposed to receive funds from the state budget. In 2010 the ministry made 1.3 billion Egyptian pounds ($146.40 million) a year; in 2015 income was down to 275 million pounds.

"That's a little over 20 million pounds a month. I have to pay 80 million a month in salaries alone."

Anani says that without a revival in tourism none of his new projects, such as the introduction of year-long museums and heritage site passes or extending opening hours will have the desired effect.

Neither will reopening Pyramid Complex of Unas, built for Pharaoh Unas, the ninth and final king of the Fifth Dynasty in the mid 24th century BC, which has been closed since 1998 for fear of overcrowding and which Anani reopened in May.

Still, Egypt plans to partially open the Grand Egyptian Museum, an ambitious planned museum of Ancient Egyptian artefacts that will be the world's largest archaeological museum, in 2017, said Anani, bringing forward the scheduled opening date by a year.

This is only possible because the $248 million needed came from a Japanese loan years ago.

Financial woes also affect excavation attempts, which have seen a steep decline since 2011, he said. 

Other issues include a lack of international law experts at the ministry to help claim back Egyptian artefacts that were smuggled to other countries or claimed by the country's former colonial masters as well as the need to create a centralised database of antiquities to combat smuggling, efforts for which had stalled since the year 2000.

TEHRAN — Iran will take part in an informal meeting of OPEC countries in Algeria next month, state media reported on Thursday. 

"I will take part in this session," Oil Minister Bijan Zanganeh told the ministry's Shana news service.

Iran had previously said it had not yet taken a decision on whether to attend the closed-door meeting on the sidelines of the International Energy Forum in Algiers in late September. 

Oil markets have been carefully tracking reports of whether Iran will attend the meeting, which other OPEC members hope will lead to a freeze in production that would boost oil prices. 

Iran refused to accept a freeze earlier this year, having just emerged from international sanctions and keen to maximise its oil revenues, but rumours this week that it may have changed its position have led to a 10 per cent spike in prices, according to Bloomberg. 

Zanganeh did not comment on whether Iran, OPEC's third-biggest producer, would support a cap on production at the September meeting. 

He did mention that OPEC Secretary General Mohammed Barkindo will be visiting Iran "in the near future", according to the Shana agency. 

Adding to the difficulties of reaching an agreement, tensions have spiked in recent months with Saudi Arabia, the dominant member of OPEC. 

Iran says it has doubled its exports of oil and gas to 2.7 million barrels per day (bpd) since signing an accord with world powers in July 2015 that removed sanctions in exchange for curbs on its nuclear programme. 

Oil production has risen from 2.7 million bpd to 3.85 million bpd in that time, close to the level before international sanctions were imposed in 2012. 

DUBAI — Saudi Arabia's Deputy Crown Prince Mohammed Bin Salman will discuss the kingdom's drive to cut its reliance on oil exports in visits to China and Japan that begin next week, Saudi media and sources said on Wednesday.

In April, Prince Mohammed launched radical economic reforms designed to develop non-oil industries in Saudi Arabia and attract billions of dollars of foreign investment. Chinese and Japanese banks and companies are expected to play major roles.

The prince will visit China early next week for talks on economic ties as well as security issues, the Saudi Gazette reported. He will then visit Japan from August 31 to September 3, meeting Prime Minister Shinzo Abe, Japan's Chief Cabinet Secretary Yoshihide Suga told reporters.

From Japan, Prince Mohammed will return to China to chair Saudi Arabia's delegation to the September 4-5 summit of leaders of the world's 20 biggest economies in the eastern city of Hangzhou, the Saudi Gazette said.

A Saudi source familiar with the trip said Prince Mohammed would present to the G-20 his economic reform plan, which envisages state spending of around 270 billion riyals ($72 billion) in the next five years on projects to diversify the economy.

Prince Mohammed's father, King Salman, led the Saudi delegation to last year's G-20 summit in Turkey; heading this year's delegation would be a fresh political boost for the 31-year-old prince, who rose to prominence when his father took the throne in January 2015.

Saudi officials will discuss energy cooperation agreements with China and Japan, including a plan to cooperate with China in storing crude oil, the Saudi Cabinet said on Monday.

Saudi Arabia has traditionally accounted for most of Asia's crude imports, but OPEC's top producer has lost ground in a number of major markets including Russia and China, and faces a further threat from Iran, which is ramping up exports after the removal of Western sanctions.

National oil giant Saudi Aramco has been in talks with China's CNPC and Sinopec for investment opportunities in refining, marketing and petrochemicals, Saudi Energy Minister Khalid Al Falih said earlier this year.

Under Prince Mohammed's economic reforms, Riyadh plans to sell a stake of up to 5 per cent in Aramco that could be worth tens of billions of dollars, and Chinese and Japanese money could prove crucial in smoothing the sale.

In June, Saudi and Japanese officials discussed possible Japanese investments in an initial public offer of Aramco shares that might occur as soon as in 2017. Officials at top Chinese banks have said they would be interested in being involved in the offer.

AMMAN — Hikma Pharmaceuticals Plc. posted a 24 per cent increase in its earnings during the first half of the year, bringing its total revenue to $882 million, according to a company statement. 

Hikma, a multinational pharmaceutical group, has recently reported its interim results for the six months ending June 30. 

In addition to completing the West-Ward Columbus acquisition and making considerable progress in integrating its business, the group has also made strides in transferring Bedford Laboratories’ products to its injectables manufacturing facilities and promoting strategic products in its MENA markets, according to the statement.

Hikma launched 44 products and received 182 approvals in the first six months of 2016, expanding its global product portfolio. 

The group experienced double-digit growth in constant currency in Algeria and Egypt. Global injectables revenue is up 4 per cent compared with the figure recorded in H1 2015, or 5 per cent in constant currency. Also, generics revenue increased, reflecting the consolidation of four months of West-Ward Columbus. 

Hikma remains focused on higher value products as well as on improving efficiency in its key markets, the group said.

Chairman and Chief Executive Officer of Hikma Said Darwazah said: “Hikma has delivered a solid first half performance in a transitional year.  Our global injectables business is performing well, with revenue growth and strong profitability driven by a favourable product mix.  We continue to successfully transfer the Bedford products to our injectables facilities”.  

In the MENA region, Hikma is expanding its market reach and is in the advanced stages of entering the Palestinian market through a partnership with Pharmacare. The partnership involves the manufacturing and distribution of an initial portfolio of products that might expand over time.

ANKARA — Turkey's central bank on Tuesday cut its main interest rate by 25 basis points, defying a sharp jump in inflation following the failed July 15 coup.

The central bank said the overnight lending rate was trimmed to 8.5 per cent from 8.75 per cent and its one-week repurchasing rate remained stable at 7.5 per cent. 

The overnight borrowing rate also remained intact at 7.25 per cent, it said in a statement on its website.

The cut was the fifth straight trimming by the central bank under new Governor Murat Cetinkaya amid strong pressure from President Recep Tayyip Erdogan for a more dovish monetary policy to stimulate growth.

However, inflation had ticked up to 8.79 per cent in July compared with 7.64 per cent in June, with the effects of the coup in particular putting pressure on food prices.

But justifying its decision, the bank said in a statement: "Processed food prices, which have recently shown marked increases, are projected to display a downward correction in the short term.

"Meanwhile, the core inflation trend is expected to improve gradually." 

Despite a decline in tourism revenues due to the coup and a slew of militant attacks, it said that activity showed a "moderate and stable course of growth".

While inflation remains high, the bank has also been gladdened to see a rally of the Turkish lira which had crashed against the dollar in the wake of the coup but has rallied over 4 per cent in the last month.

But some economists expressed concern about the cut, saying that the bank needed to pay far greater attention to inflation.

The cut "provides further evidence that the council is paying scant regard to its inflation target", said William Jackson, senior emerging markets economist a Capital Economics in London.

He said the bank's "relentlessly dovish stance" suggests that further rate cuts totalling 50 basis cuts were in the offing before the end of the year.

"The council appears to be underestimating the risks facing the Turkish economy," he added, projecting inflation to shoot up to 10 per cent by the end of the year despite the bank's optimism that it would fall.

Turkey's inflation target has been set at 5 per cent for the last half decade.

AMMAN — The Amman Stock Exchange (ASE) announced that Universal Chemical Industries (UNIC) Company will be suspended from trading starting August 23, 2016, in accordance with a decision by the company's general assembly to have it liquidated voluntarily.

The company’s shares will remain suspended until a further notification is announced, the ASE said on its website on Tuesday. 

DUBAI — The world's largest indoor theme park is set to open in Dubai this month to lure back some of the tourists and residents who often flee abroad during the scorching desert summer.

In a sandy suburb beyond Dubai's concrete jungle and pockets of artificially green spaces, IMG Worlds of Adventure's boxy exterior belies a 140,000-square metre air-conditioned cathedral of entertainment teeming with animatronic dinosaurs, roller coasters, Marvel superheroes and Cartoon Network characters.

Zombies pop out from dark corners of a haunted house and the Velociraptor coaster throttles passengers within a misty simulated rain forest dubbed the Lost Valley.

As it stands now, stir-crazy families in Dubai — a tourism and financial hub which already boasts the world's tallest building — have few places to stretch their legs beyond expensive malls while temperatures outside can approach 50^oC.

Even an indoor ski slope, complete with real-life penguins, has not been enough to stanch the exodus that leaves roads and public spaces eerily quiet through the hot months.

"Dubai still suffers from a certain amount of seasonality during the June, July, August period," Lennard Otto, CEO of the new $1 billion attraction, told Reuters.

"We will hopefully drive tourism in those periods to make Dubai an all-year-round destination," he said, ahead of the theme park's August 31 opening.

"Today there's a gap in this market and in the region. People are actually travelling to the far east and the far west to experience theme parks," Otto said.

Both the United Arab Emirates, which includes Dubai, and Saudi Arabia have launched initiatives this year to create more fun for their car and smartphone-obsessed people.

As part of a plan to diversify its economy away from oil, Saudi Arabia announced in June that it was in talks with Six Flags Entertainment Corp. to build theme parks, and the UAE created a "Happiness Ministry" in February to look at ways of measuring and improving quality of life.

Happiness in Dubai may soon be in no short supply, as a government-backed rival by Dubai Parks and Resorts will open by year's end, while a Fox-branded theme park, with attractions based on TV and film titles such as "Ice Age" and "The Simpsons", is set to open in 2020.

AMMAN — The general budget in the first six months of 2016 registered a post-assistance deficit of JD291.2 million, compared with JD223.5 million in the same period of 2015, the Finance Ministry said on Monday.

The ministry added that local revenues and external grants until the end of June 2016 totalled some JD3.528 billion, compared with JD3.350 billion in the January-June period of 2015, as reported by the Jordan News Agency, Petra.

Local revenues in the first half of 2016 stood at JD3.288 billion, marking a 6.7 per cent growth, when compared to the same period of 2015 that registered JD3.055 billion.

On the other hand, expenditure in the January-June period of 2016 totalled JD3.819 billion, compared with JD3.573 billion registered in the same period of the previous year.