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AMMAN — The Central Bank of Jordan (CBJ) launched on March 15 the new real time gross settlement systems (RTGS) service, as of March 15.

In a statement, CBJ Governor Ziyad Fariz  said RTGS are funds transfer systems that will facilitate money transfer from one bank to another, adding that the step will boost economic and banking soundness and efficiency in the Kingdom.

It will ensure safe and efficient money transfer, which supports the financial policy and fosters financial stability in the Kingdom, he added. 

Settlement in "real time" means payment transaction is not subjected to any waiting period. The transactions are settled as soon as they are processed. 

DUBAI/KHOBAR, Saudi Arabia — As the global energy industry stares transfixed at a spectacular drop in US rigs, Saudi Arabia is ramping up the number of machines drilling for oil and gas despite a sharp fall in the price of crude.

Industry sources and analysts say the Organisation of Exporting Countries (OPEC) kingpin is looking beyond the halving of global oil prices since June 2014 to a time when crude could again be in short supply.

Riyadh is therefore keen to preserve what is known as its spare capacity, the kingdom's unique ability to raise oil output quickly at any given moment.

But to achieve that, Saudi Arabia has to drill much more than in the past, after boosting output to record levels to compensate for global supply outages in the past four years.

"The Saudis are probably worried about everyone else reducing capital expenditure as a result of low oil prices and about non-OPEC output falling off a cliff at some point. We all know that supply disruptions are unpredictable but they are certain," said Gary Ross, executive chairman of New York oil consultancy PIRA.

"The increase in Saudi rig numbers is like a signal to the industry — let's be rational. We will need supply growth in the future," he added.

State oil giant Saudi Aramco used a record-high 210 oil and gas rigs in 2014, up from around 150 in 2013, 140 in 2012 and some 100 in 2011, according to previous industry estimates.

Amin Nasser, Aramco's senior vice-president for upstream operations, said this month his firm had yet to decide whether to increase the rig number in 2015 from the 212 currently in use.

But data shows the numbers are still rising.

Excluding non-US-registered rigs such as Chinese or Russian, February 2015 saw a total Saudi rig count of 155, up from 150 in January and 146 in December, according to data from OPEC and US oil services company Baker Hughes. Since 2010, the number of US-registered rigs has doubled from 67.

Sadad Al Husseini, a former senior executive at Aramco and now an energy consultant, said the rise in the Saudi oil rig count had been evolving over a long period.

"You need to drill more wells if you are producing 10 million barrels per day and maintaining your spare capacity," he said.

"It is also a natural phenomenon in the oil business, that the more you produce, the more you deplete your reserves and the more rapidly your field capacity declines. You need to drill more wells more frequently, simply to maintain production capacity," Husseini added.

Focus on gas 

Maintaining Saudi Arabia's spare-capacity cushion for oil is costly.

The country is effectively investing in something it cannot monetise immediately, but it sees the strategy as a pillar of its stature as the most important global oil player and a Group of 20 member.

In 2008, Oil Minister Ali Al Naimi said production capacity would rise to 15 million barrels per day (bpd) from 12.5 million but the plan was put on hold after the global financial meltdown of late 2008 saw oil plunge below $40 a barrel.

Subsequent events such as Libya's 2011 civil war tested the Saudi ability to ramp up output to help soothe global supply outages and showed that spare capacity could not be eroded if Riyadh wanted to continue playing a key role.

Saudi Arabia's refusal to cut output last year has played a part in the most recent oil price slump, as Riyadh fights to maintain its market share against competing sources of crude.

The OPEC heavyweight has been pumping more than 9 million bpd since mid-2011, up from 8.1-8.3 million for most of 2009-2010.

To ease pressure on its ageing giant fields, Ghawar and Abqaiq, Aramco launched the Khurais and Manifa fields with total capacity of more than 2 million bpd.

It plans to increase output from onshore fields, Shaybah and Khurais, by 550,000 bpd by 2017. It has also been ramping up drilling in offshore fields such as Safaniyah.

The projects should allow Aramco to preserve the world's largest spare-capacity cushion at more than 2 million bpd.

For 2015, industry sources estimated Aramco would deploy at least the same number of rigs as in 2014. Aramco declined to comment for this report.

Over the past two years, Saudi production has sometimes exceeded 10 million bpd in summer months as crude is burnt locally for power generation and new refineries.

That forced Aramco to put more emphasis on gas exploration, as higher gas output would help preserve spare oil capacity.

"Aramco's focus now is more on gas, so they have been moving some of their oil rigs to gas rather than terminating the contract and paying a penalty," an oil industry executive in Saudi Arabia said.

WASHINGTON — The Obama administration said Wednesday that it is in the early stages of studying claims that Gulf airlines have received market-distorting subsidies, a review involving uncharted territory for the US government.

No international trade rules or precedent by the United States exists for addressing airline subsidy claims, presenting a challenge for the administration as it determines how to proceed, a person familiar with the matter said. 

US airlines contend that Gulf carriers can lower prices and offer more amenities on newer planes because of state subsidies.

These issues do not fall under World Trade Organisation rules but rather under bilateral "Open Skies" agreements that authorise commercial flying between countries.

The agreements are silent on how to handle most subsidy claims, the source said. Yet alleged subsidies of more than $40 billion to Gulf airlines make the claim the largest that the administration has encountered and must be taken seriously, the source added.

Last week, the administration asked US airlines some 20 questions about the allegations.

"The [US government] interagency team did in fact ask the US airlines and their consultants several technical and clarifying questions about the data and information contained in their report," US Department of Transportation Press Secretary Ryan Daniels said in a statement, confirming a Reuters report.

"However, we are in the early stages of thoroughly reviewing this matter in close coordination with our interagency partners," he added.

The Obama administration has filed trade complaints on issues ranging from China's imposition of extra duties on American cars to India's ban on certain US agricultural goods to allegedly protect against avian influenza.

Aviation also has been at the centre of a decade-old dispute in which the WTO found that plane makers from the United States and the European Union had received illegal subsidies.

But Geneva-based watchdog's rules do not apply to air traffic rights or airline services, although it keeps these under review broadly.

Meanwhile, the dispute between US and Gulf airlines has escalated.

Delta Air Lines, United Airlines, American Airlines and their unions on Wednesday called on the administration to request a freeze on additional Gulf-airline flight departures to the United States.

On Tuesday, Emirates airline President Tim Clark promised to rebut the allegations, while Etihad Airways Chief Executive Officer James Hogan said the company received loans, not subsidies, from its government shareholder. Both had arranged meetings with Obama administration officials.

Hogan described the United Arab emirates (UAE) carrier as a "David" battling the US "Goliaths".

Hogan told an aviation industry summit in Washington that airlines everywhere benefit from state support, dismissing the claims of unfair competition by Gulf carriers in a report released by the top three US airlines.

As a battle heats up between Gulf airlines and rivals in Europe and the US, he accused American Airlines, Delta Airlines and United Airlines of themselves hiding behind protection.

"The world's two largest airline markets, the United States and the European Union, are closed, giving their own airlines a huge advantage in scale and scope," he told the US Chamber of Commerce Foundation's 14th Annual Aviation Summit.

Hogan said established aviation giants were built on various kinds of state support, including preferential market access, infrastructure and airports, hardly different from what Gulf carriers Qatar Airways, Etihad and Emirates are accused of.

He also cited the government-backed bailouts of US carriers when they failed.

"Many, many airlines, including many in this room, have benefitted from years of government bailouts, write-offs and loans, everything from bankruptcy protection to covering pension fund obligations, to straight-out financial payments," he  indicated.

"Etihad is a David who's been facing Goliaths since 2003," he argued. "The three biggest US airlines working together carry 34 times more passengers”.

In early March, American Airlines, Delta Airlines and United Airlines, along with US airline labour groups, accused the Gulf three of enjoying interest-free loans, subsidised airport charges, government protection on fuel losses, and below-market labour costs that are considered unfair subsidies by the WTO.

Claiming $42 billion in "unfair" subsidies to wrest business away from competitors, they called on the US government to open new talks over bilateral air agreements to address what they said are violations of those pacts, giving the Gulf carriers unfair competitive advantage. 

These "multi-billion dollar subsidies" had distorted the marketplace, "to the severe detriment of US employment", the American carriers claimed.

Qatar Airways Chief Akbar Al Baker said on Monday the problem was that the US carriers do not differentiate between what is a subsidy and what is the "legitimate" equity that a state-owned carrier gets.

Delta anyway flies "crap airplanes that are 35 years old," he added.

Noting that any money his airline receives from the state is in the form of "legitimate" equity, Al Baker indicated that his company's fleet of aircraft were much cleaner for the environment in comparison to Delta.

"The unfortunate thing is that because they are so inefficient they want to blame us, whilst we are very efficient, for their failures and drawbacks," he said.  "The issue is that they cannot stand the progress the Gulf carriers are making."

UAE Economy Minister Sultan Al Mansouri was quoted as calling them "false and unacceptable" by the Emarat Al Youm newspaper.

However, European carriers have also joined the argument.

Last week, French and German transport ministers called on the European Commission to tackle the issue of subsidies to Gulf carriers.

The French transport minister, Alain Vidalies, said the Gulf airlines were benefitting from "unfair competitive practices".

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.