Business

AMMAN – Tourism revenues went up by 11.1 per cent during the first quarter of this year to around $1.02 billion from $924 million generated during the same period of 2013. According to the Central Bank of Jordan (CBJ), the rise is attributed to the increase in the number of tourists from the Gulf, US, Libya, Yemen and Jordanians residing abroad. Meanwhile, expatriates’ remittances went up by 3.1 per cent during the first quarter of 2014, to $861.5 million from $836 million in the same period of last year, the CBJ reported.

AMMAN — A Jordanian economic team, led by Saleh Kharabsheh, secretary general of the Ministry of Planning and International Cooperation, discussed this week with Sami Saqaabi, assistant secretary of Kuwait's finance ministry for economic issues and an accompanying delegation,  prospects for further cooperation between the Kingdom and the Gulf Cooperation Council. Talks also covered means to boost trade volume between both sides.  

AMMAN — Arab bankers on Wednesday blamed "Arab Spring" for the deterioration in the region's economies. 

Top executives in the banking sector called during the opening session of the Annual Arab Banking Conference for more collaborative economic projects between Arab countries to exit the consequences of political unrest in the region.

They highlighted some of the repercussions on the economies of several Arab countries due to political changes during the past three years.

Mohammad Barakat, chairman of the Union of Arab Banks mentioned the drop in direct and indirect investments, and in foreign reserves, an increase in inflation rates and public debt levels, a decline in the living conditions and basic services, and a spread of unemployment among youths as some of the results caused of the political situation in the region. 

"Some Arab countries are still going through radical transformations, accompanied by negative economic development,” he said at the conference that discusses strategies for the advancement of Arab economies. 

According to the Egyptian banker,  government spending to address rising social demands has placed growing responsibilities on countries in transition.

However, he noted that due to supportive measures taken by monetary authorities, gradual improvement is evolving in their economies this year, which might lead to an increase in economic growth,

"The economic growth in countries in transition is expected to increase from 3.4 per cent in 2013 to 5 per cent in 2014,  enabling to gross domestic product of the entire region to rise from approximately $2.74 trillion to around $2.86 trillion," he said.

Speaking on behalf of Prime Minister Abdalla  Ensour, Central Bank of Jordan (CBJ) Governor Ziad Fariz reviewed Jordan's economic reform strategy. 

He described the removal of fuel subsidies as a fiscal reform step aiming to direct subsidies to Jordanians who deserve government support. 

He also highlighted measures to improve tax collection and to diversify resources of the Kingdom’s energy imports.  

Bassem Al Salem, chairman of the Association of Banks in Jordan, said Arab countries still face the challenges of moving towards democracy noting that political uncertainties affect the economic activity in the region.

"Economic growth rates in Arab countries have dropped from 4.6 per cent in 2012 to 2.1 per cent in 2013," he said, adding that the volume of direct foreign investments plunged from $96 billion in 2008 to $47 billion by the end of 2012.

Al Salem said that, despite the economic integration potential, the region's countries share economic challenges such as rising unemployment, inadequate energy supplies and lack of financial recourses.

Pointing to an estimated population of 350 million, he urged Arab governments to develop a strategy that can achieve "economic prosperity".

"Governments should adopt clear work plans to achieve comprehensive economic development and increase productivity by facilitating the movement of workers across borders, and attracting investments in technology, in addition to developing human recourses and upgrading legislative frames that encourage investments," he said.

He also called for giving priority to "promising sectors with the most significant effect on economic development", especially those with added value, such as renewable energy and tourism as they create job opportunities and help transform Arab economies from consumerism to productivity.

According to Al Salem, banks should receive further backing from governments, whose  support should not be exclusive to small and medium-size enterprises.

"Governments should directly invest in capitals and provide guarantees for risky sectors. In addition, they should provide liquidity at reasonable rates to support low-income sectors," he said. 

Joseph Torbey, chairman of the World Union of Arab Bankers, regretted the absence of economic activities that stimulate economic growth and suggested that banks should put more efforts into attracting financial recourses and employ them better in Arab economies.

The two-day conference is organised by the Union of Arab Bankers in cooperation with the CBJ, World Union of Arab Bankers and the Association of Banks in Jordan.

SYDNEY — The Australian government Tuesday gave the go-ahead for a second international airport for Sydney, ending decades of indecision with a move predicted to boost the national economy.  

Prime Minister Tony Abbott confirmed that Badgerys Creek in western Sydney will be the site of the new airport, with planning to start immediately and construction from 2016.

"It's a long overdue decision which to be honest, has been shirked and squibbed [dodged] by successive governments for far too long," the prime minister told reporters.

Sydney's Kingsford Smith Airport is the main gateway into Australia but suffers from capacity limits, with a former transport minister describing it as "built in an age when planes were small and few".

Abbott said without a second airport Sydney would be "grievously underserviced", adding that the current airport would not be able to cope with forecast growth in passenger numbers in coming decades.

Badgerys Creek, about 45 kilometres west of Sydney's central business district, has long been proposed as a second airport site but had previously been shelved due to fears of a local voter backlash.

Abbott, who swept to power in elections last September vowing to be known as an "infrastructure prime minister", indicated that the development would proceed on a "roads first, airport second" basis.

Jobs boost  

The cost of the estimated Aus$2.5 billion ($2.35 billion) airport will be met mainly by the private sector, and the first flight was realistically not likely until the mid-2020s, he said.

As a first step, the government will offer the owner of Kingsford Smith Airport, Southern Cross Airports Corporation, the right of first refusal in relation to an airport at Badgerys Creek.

According to Abbott, the project would be good for economic growth and jobs, and could drive an increase in national gross domestic product of almost Aus$24 billion by 2060.

The government projects will create about 4,000 jobs in the construction phase, and go on to produce 35,000 jobs by 2035, increasing to 60,000 over time.

Australia's biggest airline Qantas welcomed the government's announcement, with Chief Executive Alan Joyce saying a second airport was a vital piece of economic infrastructure for Australia.

"The role of second airports has been well-established in several of the world's major capitals," Joyce said. "Sydney is the key gateway for air traffic in and out of Australia and the benefits of having two major airports will be felt nationwide."

Kingsford Smith Airport, which is only eight kilometres from the city centre, handled 36.9 million travellers in 2012 and passenger numbers are forecast to increase to 74.3 million by 2033.

It accounts for 40 per cent of international arrivals into Australia each year and 50 per cent of international air freight.

Kingsford Smith is subject to restrictions between 11pm — 6am, but Abbott left the door open to the new airport being free of a curfew given that so many fewer people lived near Badgerys Creek.

Abbott said the decision recognised the growth of Sydney's western suburbs, an area which is expected to see its population rise from two million to three million people in the next 20 years.

"A dedicated Western Sydney airport will service local aviation needs and be a much-needed relief valve for Sydney Airport," he said. "It will be a major catalyst for investment, jobs growth and tourism in the region for decades to come."

However, some are still expected to disagree with the plan. Stephen Bali from the No Badgerys Creek Airport Inc. told the ABC that "large segments across western Sydney will be fighting against this".

Badgerys Creek has been a potential airport site since 1986 and the federal government has bought about 1,800 hectares (4,446 acres) in the area.

The New South Wales state government has kept the surrounds largely free of development since then.

MILAN/LONDON — Israel's drive to export its new-found natural gas could help to rebuild strained ties with old regional allies Egypt and Turkey, but could deprive Europe of a precious alternative to Russian gas.

Israel has in recent months already signed energy deals with Jordan’s Arab Potash Company and the Palestinian Authority, though relations with the Palestinians are at a low ebb, and now needs to expand its export horizons to cash in on its huge energy discoveries.

If all goes well, the latest developments could see first pipelines being laid between Israel and Turkey as soon as 2015, and gas cooperation between Israel and Egypt is also emerging, which would allow export access to Asia's major markets.

A growing population and soaring demand have left Egypt's own liquefied natural gas export (LNG) plants in need of new supply, as domestic shortages eat into seaborne exports through the Suez Canal to the world's most lucrative market in Asia.

This has put Israel's previous plans to pump its gas reserves into a future export plant in Cyprus on the back burner, dealing a major blow to the indebted Mediterranean island's ambitions to become a global player in the gas market.

A Cypriot LNG export plant was due to deliver at least five million tonnes a year to Europe and Asia, allowing Europe to reduce its growing dependency on Russia, which has become of particular concern since the crisis in Ukraine cast a Cold War chill over East-West relations.

Israel's new plans throw Cypriot developments into doubt as investors would require more gas than Cyprus has on offer to make returns on multibillion-dollar investments. 

"If Israel has really ditched Cyprus as a partner to develop the region's gas resources, then we [Cyprus] really do have to find quite a lot more gas if we want to become a viable exporter, and that would inevitably throw our plans back by several years," said one source involved in developing Cyprus' gas reserves. 

Gateway alliances 

The possibility of sanctions on Russia's energy sector in response to Moscow's annexation of Crimea and troop build-up along Ukraine's eastern border have underscored Europe's acute need to diversify its oil and gas sources.

Israel plans to export gas by pipeline and through several floating LNG production plants, which cool gas to liquid form, so they can ship it to the world's largest markets.

At stake for Israel is a $150 billion tax take should export deals be agreed by a consortium operating its gas fields. Its strategic re-alignment effectively places a tantalisingly close new gas province out of Europe's reach.

"Ultimately Egypt and Turkey need energy, and the fact that we have it is creating a regional convergence of interests," an Israeli diplomatic source told Reuters.

Egypt offers a way for the US-Israeli group of companies developing Israel's giant Leviathan gas field to reach the Asian market, where LNG fetches about twice the price Europeans pay.

"If the companies operating the fields in Israel could reach an agreement with the companies that are operating those  facilities, it seems it would benefit Egypt, Israel and all the companies," said Eugene Kandel, head of the national economic council at the Israeli prime minister's office.

Egypt and Israel have had only limited economic cooperation since signing a landmark peace accord in 1979. Political turmoil in Egypt in recent years has further limited cooperation between the neighbouring countries.

Talks between the Leviathan consortium — Israel's Delek Drilling, Ratio, and Avner Oil, and US-headquartered Noble Energy — and Egyptian authorities are focusing on feeding Israeli gas into the country's idled LNG export facilities.

Britain's BG Group, which runs one of Egypt's under-utilised LNG plants and is among the world's top LNG trading firms, is in talks with the Leviathan partners.

The favoured option is to build a sub-sea pipeline from Leviathan to link up with BG Group's offshore pipeline network in Egyptian waters, allowing Israeli gas to feed directly into its LNG plant at Idku, according to industry sources.

If realised, this would not only revive output at Idku but also mean that Israel's first LNG exports would take place from an Egyptian plant.

Previous land-based pipelines between Egypt and Israel were repeatedly bombed by groups opposed to links with Israel, but a subsea pipeline would be much harder to target.

Egypt is struggling to meet rising domestic demand for energy, and a fall in domestic output and power blackouts have stirred dissent in the Arab world's most populous state.

Israeli gas could help ease domestic shortages, take the sting out of the energy-related unrest that contributed to the overthrow of former president Mohamed Morsi, and lighten Egypt's $6 billion debt burden to energy majors like BG Group.

As part of a twin-track export policy, Israel also aims to ship LNG to distant Asian and South American markets through a floating plant to be moored above the Leviathan field.

"We definitely want to strengthen the economic ties with our neighbours, but we also don't want to be too exposed to possible upheavals in the region, so Israel has to have outlets that do not limit us to the region," Kandel said.

Turkish rapprochement 

Once close allies, ties between Israel and Turkey were severely damaged following a deadly raid by Israeli commandos on a Turkish yacht carrying pro-Palestinian activists trying to defy an Israeli blockade on the Gaza Strip in 2010.

Poor relations remain a barrier to a deal on gas, though the sides are talking.

"High-level negotiations on resolving political issues, and lower-level negotiations aimed at making progress on energy have always been held," said a senior Turkish energy official. "Normalisation on the relations will pave the way for investment and cooperation on energy."

US-led reconciliation efforts in recent months could be boosted by the promise of gas.

"There is clearly significant potential for turning East Mediterranean's new gas wealth from a potential source of conflict to a catalyst for regional cooperation," said Oxford Research Group analyst Sara Hassan. "Turkey will want at least to be seen as trying to leverage better conditions for Palestinians alongside any potential deal."

Peace talks to resolve the generations-old conflict between Israel and the Palestinians are close to collapse, with the Israeli government beginning to impose new economic sanctions on president Mahmoud Abbas' West Bank Palestinian Authority amid mutual recriminations about the deadlock.

Talks between the Leviathan consortium and Turkish counterparts are focusing on building a 10-billion-cubic-metre (bcm) sub-sea pipeline at an expected cost of $2.2 billion, giving Israel access to a major emerging market and one of Europe's biggest power markets by 2023.

"We think construction phase for a pipeline to transport Israeli gas to Turkey could begin in the second half of 2015," a Turkish energy official said.

A separate yet-to-be-built pipeline linking Europe with the Caspian through Turkey in 2019 could eventually also open up a new market for Israeli gas in western Europe.

An envisaged 25-year supply deal would steady Turkey-Israel ties and boost economic links, while Turkish sanctions against Israel would be lifted and ambassadors reinstated, he said.

"The Turkish market for natural gas is the only growing one [in the region], and the drive to diversify away from Russia will justify Israeli gas to join Azeri, Iranian and Kurdish gas," said Mehmet Ogutcu, chairman of London-based Global Resources Corporation consultancy.

"The Turks realise that if this gas project is implemented without their involvement, they will not be a game-player in East Med. Hence, the Turkish private sector could be encouraged to take the lead and politicians follow them at a later stage," according to Ogutcu. 

Cyprus cut loose

Already, the gas finds are spurring progress in talks to resolve an even longer-standing dispute over territory between Turkey and Cyprus, across whose maritime boundary any Israeli gas pipeline would have to travel to reach Turkey.

Cyprus has been divided since the north of the island was occupied by Turkish troops in 1974.

"It does look as if natural gas could help to bring the two sides closer to a settlement since Turkey's primary aim is securing the resources to meet skyrocketing demand," said Nicolo Sartori, energy and defence analyst at the Institute for International Affairs in Rome.

"Efforts to get the Eastern Mediterranean gas pipeline have stepped up over the past few months, with the US playing a very hands-on role," said Ogotcu. "The Cyprus settlement is on top of the agenda as it will allow Cyprus to use this pipeline and add its surplus Aphrodite gas."

That could persuade Cyprus to give its consent to a pipeline that went through waters claimed by both the Greek-speaking and Turkish halves of the island. Since last year's downgrade of gas reserves at Cyprus' flagship Aphrodite field, it does not have enough gas to underpin its planned LNG export plant at Vassilikos.

Cypriot officials had counted on additional supplies from Israel to make the export project feasible, encouraged by the fact that Noble and Delek, two of Leviathan's main developers, also own Aphrodite.

Deepening Israeli reluctance to share its gas with a rival Cypriot project has stalled those talks.

AMMAN — The unemployment rate during the first quarter of 2014 went down slightly compared to the same period of last year, according to the latest survey conducted by the Department of Statistics (DoS). Unemployment reached 11.8 per cent in January-March 2014 compared with 12.8 per cent during the same period in 2013, the DoS report said, indicating that the unemployment rate is particularly high, at 18.1 per cent, among holders of postgraduate degrees. Unemployment stood at 26 per cent for male holders of university and postgraduate degrees against 76 per cent for female degree holders, the survey showed. The highest unemployment rates  were registered among the 15-19 and 20-24 age groups, standing at 36.6 per cent and 27.9 per cent respectively. The highest unemployment rates were registered in Tafileh and Zarqa governorates, reaching 18.9 per cent and 8.1 per cent respectively.

CAIRO — Egypt, grappling with an energy crunch, will enforce a ban on the production and import of air conditioners that can be set lower than 20oC, aiming to reassure citizens and industry hit with power cuts and fuel shortages.

The failure of successive governments in Cairo to develop sound energy policies has discouraged foreign companies from tapping gas reserves needed to meet increasing consumption in the most populous Arab country.

Power generation in Egypt is largely dependent on natural gas, now in short supply. The government predicts production will fail to meet surging domestic demand in the next fiscal year, starting in July.

Trade, Industry and Investment Minister Mounir Fakhry Abdel Nour cast the restrictions on air conditioners as a part of the government plan to cut energy use in order to ease the worsening crisis in the sector.

The decision was taken last year but will be implemented starting mid-June, Abdel Nour said in a statement.

The ban on air conditioners outside the government's specification will contribute to "easing the burden on Egyptian families," the minister added.

Egypt will hold presidential elections late next month, just before the hot summer months when air conditioners are cranked up, adding pressure to an already stretched electricity grid.

Chaos in the politically sensitive energy sector, currently kept afloat by petroleum product handouts from Gulf Arab countries, will be among the biggest challenges facing the country's next president.

Long lines at gas stations and power cuts fuelled popular anger against president Mohamed Morsi ahead of his ouster by the army last summer.

Experts say the energy crunch is worsening and will not be resolved until more gas production comes on-stream, which is dependent on Cairo encouraging large investments. Such long-term policy decisions have been put off repeatedly.

With daily power cuts darkening homes and businesses ahead of the summer, the government is keen to be seen as active in tackling the shortages, though some ministers have acknowledged the problem is insurmountable in the short term.

The electricity minister said on Saturday the government would not be able to prevent power cuts this summer.  

Separately, the planning minister said in an interview in Washington that Egypt plans to boost electricity prices for the richest 20 per cent of its citizens before the presidential elections at the end of May, as the country has “no time to waste” in starting reforms.

Ashraf Al Arabi, Egypt's minister of planning and international cooperation, this week said the decision on raising gasoline prices will be taken "very soon”, but declined to provide further details.

Arabi's sense of urgency suggested that for the first time in years, Egypt was on the same page with the International Monetary Fund (IMF), which has long urged the country to push through structural reforms, such as gradually reducing costly subsidies.

After the 2011 uprising that toppled Hosni Mubarak, already high energy subsidy costs ballooned to a fifth of state spending as the Egyptian pound plunged, making imports more expensive.

Egypt's finance minister said last month that spending on energy subsidies next year would be 10-12 per cent above the 130 billion Egyptian pounds ($19 billion) budgeted for, unless immediate reforms are made.

"This energy subsidy system is unsustainable; we cannot afford [for] this to continue," Al Arabi said on the sidelines of the IMF-World Bank meetings in Washington.

"We don't have time to waste. ... It's better for Egypt to start some of these measures at least before the presidential election, just to pave the way for the coming president, to make his life easier," he added.

Arabi declined to specify by how much electricity prices would rise, saying the issue was still under negotiation. He also emphasised the price hikes would be gradual, and could take three to five years to implement in full.

He said the government had agreed to allocate at least 15 per cent of its subsidy savings to social programmes and the poor.

"This will benefit the poor, because we will take this from the rich and reallocate it to the poor and social spending," he added. "So I believe we have a good story to tell to the Egyptian people."

Egypt sells many energy products at prices substantially below the cost of production. But one cash-strapped government after another has resisted attacking the wasteful system, fearful that raising fuel prices could spark unrest.

The previous government of Mohamed Morsi was already trying to cut spending to contain a ballooning budget deficit, and was in negotiations with the IMF for a loan programme that would have required Egypt to raise taxes and cut subsidies. But negotiations were never completed before Morsi was toppled last July.

Since then, Egypt has relied on billions of dollars in aid from the Gulf Arab states of Saudi Arabia, United Arab Emirates and Kuwait.

"What I think Egypt should do is use continued Gulf support to create a breathing space, so that reform can be gradual, and you're not forced into abrupt reforms by running out of money," Christopher Jarvis, the IMF's mission chief for Egypt, said in an earlier briefing with reporters. "I think the sooner reform is started, the better. But I see it as a process that will take several years." Arabi said Egypt plans to raise gas prices "very soon", declining to elaborate further.

He said the government will make a bigger push to distribute smart cards for fuel, part of a programme to cut costs for the heavily subsidised commodity by reducing so-called "leakages," or smuggling and selling of gasoline on the black market.

The government in October said it would print five million smart cards to give to motorists, who would use them to buy gasoline and diesel at fuel stations, allowing the government to track and monitor deliveries.

A smart card company contracted for the project alleged earlier this month that the Egyptian government was taking too long to roll out the system.

Arabi said only two million or so cards have been distributed so far, and the government plans to distribute the remaining cards in the next two to three months.

"Once we have this smart card system, we will save at least 15 to 20 per cent on leakages in the system," he remarked.

Egypt on Sunday also said it plans to introduce a smart card system for subsidised bread by July.

Arabi said any of Egypt's presidential candidates would support moving forward on subsidy reforms and other changes to the economy.

"The Egyptian challenges are well known to everybody," he said. "We keep talking about these same problems, at least in the last 30 or 40 years. ... It's time to reform," he concluded.

AMMAN — Jordan Phosphate Mines Company (JPMC) and Agricultural Materials Traders and Producers Association (AMTPA) on Saturday studied signing a memorandum of understanding to organise selling fertilisers to AMTPA member factories at preferential prices, providing that the Ministry of Agriculture supervises the process. JPMC Chairman Amer Majali promised AMTPA to study the demands of liquid fertilisers plant owners as it corresponds with JPMC interests and the national industry. Majali said there should be more cooperation between JPMC and fertiliser plants regarding the needed quantities on condition that plants present their requests at the beginning of each year on a monthly basis. JPMC will provide plants with the material according to a plan that will be announced later upon the final signing of the memorandum. Agriculture Minister Akef Zu’bi stressed that the ministry will cooperate with both parties to serve farmers and agricultural materials producers. Head of AMTPA Mahmoud Tubeishi highlighted liquid fertilisers because of its importance in raising the added value of national fertiliser products and raising the value of exports to JD300 million annually. He noted that 30 plants are involved in these activities with 300 agricultural companies being relevant to its transactions, and employing around 3,500 people. 

AMMAN —  Jordanian Businessmen Association (JBA) President Hamdi Tabbaa discussed with a team from the Turkish Exporters Assembly on Sunday the arrangements for a Turkish economy delegation’s visit to the Kingdom on April 27. Tabbaa expressed hope that the visiting private sector delegation include investors to launch projects in Jordan and achieve tangible results in light of the successful work visit of His Majesty King Abdullah to Turkey in 2013 to enhance bilateral economic ties between the two countries. He also briefed the delegation on the investment climate in the Kingdom and the export advantages as products enter Arab and international markets customs free. 

KUWAIT CITY — The Kuwait National Petroleum Company (KNPC) on Sunday signed contracts worth $12 billion (nine billion euros) with three international consortia to upgrade two refineries and invited bids to build a new multi-billion-dollar refinery.

State-owned KNPC's chief Mohammed Al Mutairi signed the contracts with the three consortia led by Britain's Petrofac, US Fluor and Japan's JGC Corporation. Most of the other companies in the consortia are South Korean.

Mutairi said the project is due to be completed in early 2018.

The cost of the venture — called the Clean Fuel Project — is more than $13 billion if smaller preparatory contracts are added, lower than the previous estimated cost of $16.4 billion, project manager Abdullah Al Ajmi told AFP.

The contracts, the first mega-project in the Organisation of Petroleum Exporting Countries (OPEC) member's vital oil sector for 25 years, will upgrade two of the three existing refineries by installing 37 advanced processing units that will reduce sulphur and carbon pollutants, Mutairi told reporters.

The current production capacity of the two refineries of Mina Al Ahmadi and Mina Abdullah is around 730,000 barrels per day (bpd), while the capacity of Kuwait's third refinery at Shuaiba is 200,000 bpd.

At the end of the project, the capacity of the two refineries will increase to 800,000 bpd, while Kuwait plans to shut the third refinery.

KNPC on Sunday began inviting bids for two of the five-package project to build a state-of-the-art refinery with a capacity of 615,000 bpd, project manager Khaled Al Awadhi told reporters. The two tenders are for marine works and storage tanks.

Next month, the company will tender the three main packages for building the body of the refinery, said Awadhi, adding that KNPC hopes to award all the five contracts in the first quarter of next year.

The refinery, estimated to cost around $15 billion, is slated to come onstream in between the end of 2018 and the first quarter of 2019, Awadhi added.

Kuwait's refining capacity will reach over 1.4 million bpd from the current level of 930,000 bpd, when the projects are completed.

Most of the production will be for export to Asian and European markets, he remarked.

The two projects have been repeatedly delayed because of political disputes between parliament and the government.

The project to build a new refinery was scrapped by the government around five years ago, after five Japanese and South Korean companies were awarded contracts.

Lawmakers had opposed the plan complaining of a lack of transparency in the tendering process, but they have not raised objections to the new contracts.

Separately, Kuwait plans to raise its oil production capacity by 150,000 bpd to 3.4 million bpd by mid-2015.

"[Kuwait's] current production capacity is 3.25 million bpd. We plan to add another 150,000 bpd by mid-2015," said Hashim Hashim, the chief executive officer of Kuwait Oil Company (KOC), which is responsible for exploration and production.

The company also plans to add between 400,000 and 500,000 bpd to the country's production capacity to fulfil Kuwait's aim to raise output capacity to 4 million bpd by 2020, Hashim added on the sidelines of a recent global oil and gas conference.

He indicated that Kuwait currently pumps around 3 million bpd and could "increase production depending on market conditions".

According to Hashim, current oil prices of just over $100 (70 euros) a barrel are "fair".

Speaking during the conference, KOC acting manager for contracts Moomen Al Ghawas said the company has contracts under construction worth $35 billion.