OPEC Agrees, Women Doing More And Freezing Temperatures
OPEC reached its first agreement since 2008 on oil output cuts after Saudi Arabia accepted “a big hit” on its production and dropped its demand to Iran to slash output, pushing up crude prices by around 10 percent. Fast-growing producer Iraq also agreed to curtail its booming output, while non-OPEC Russia will join output cuts for the first time in 15 years to help the Organization of the Petroleum Exporting Countries prop up oil prices.
“OPEC has proved to the sceptics that it is not dead. The move will speed up market rebalancing and erosion of the global oil glut,” said OPEC watcher Amrita Sen from consultancy Energy Aspects.
There was one causality. Indonesia, the group’s only East Asian member, said it would suspend its membership after rejoining only this year as it was not willing to comply with the output cuts sought.
The agreement came after overcoming huge political hurdles that seemed insurmountable at one point. Iran and Russia are effectively fighting proxy wars against Saudi Arabia, in Yemen and Syria, and many sceptics said the countries would struggle to find a compromise.
Saudi Energy Minister Khalid al-Falih said ahead of the meeting that his country was prepared to accept “a big hit” on production to get a deal done.
Some observers were more cautious. Scepticism looms despite the agreement because it will cap production levels, not export levels. Furthermore, prices are still at levels at which they were in September and October, when plans for a cut were first announced, and are at less than half their levels of mid-2014, when the glut started.
Cuts are divided among members.
Saudi Arabia will take the lion’s share of cuts by reducing output by almost 0.5 million bpd to 10.06 million bpd. Its Gulf OPEC allies – the United Arab Emirates, Kuwait and Qatar – will cut by a total 0.3 million bpd.
Iraq, which had insisted on higher output quotas to fund its fight against Islamic State militants, unexpectedly agreed to reduce production by 0.2 million bpd.
Iran was allowed to boost production slightly from its October level – a victory for Tehran, which has long argued it needs to regain market share lost under Western sanctions.
Al-Falih had long insisted OPEC would limit output only if non-OPEC producers contributed. Russia had previously resisted participating and instead pushed production to new records in recent months. “Russia will gradually cut output in the first half of 2017 by up to 300,000 barrels per day, on a tight schedule as technical capabilities allow,” Russian Energy Minister Alexander Novak said from Moscow.
On Monday, Saudi Arabia pulled out from the non-OPEC meeting. The reason given was that the OPEC ministers should agree to the cut and then present the agreement to non-OPEC countries. The meeting, ahead of the meeting, was set to bring together both OPEC and non-OPEC producers to discuss future measures, such as production cuts, to ease out the market glut. In any case, OPEC would not be OPEC without a last-minute quarrel threatening to derail the deal.
As ministerial talks got underway, OPEC’s second-largest producer Iraq insisted it could not afford to cut output, given the cost of its war against Islamic State. But that problem was solved.
Kuwait, Saudi Arabia best buddies
Kuwait assured its solidarity with Saudi Arabia in its efforts to stave off all threats and safeguard Muslim sites, Kuwait’s Deputy Prime Minister and Interior Minister Sheikh Mohammad Al-Khaled Al-Hamad Al-Sabah said on Tuesday.
These remarks were made in a speech by the Kuwaiti minister during the 35th meeting of Gulf Cooperation Council (GCC) Interior Ministers, presided over by Saudi Crown Prince, Deputy Prime Minister and Interior Minister Prince Mohammad bin Nayef.
He said that it is “part of regular discussions to review progress made in security issues of mutual concern, which call for increased cooperation and appropriate decision- making.”
Sheikh Mohammad Al-Khaled said that the GCC must be extra cautious, as “current challenges and obstacles require us to forge a concerted stance in a volatile juncture that the world is going through. Terrorism and extremism represent a grave threat that risk tearing apart nations in our region.”
Kuwait and Saudi Arabia discussed ways to boost mutual cooperation in the security field, including coordination, exchange of information, and creating integration between GCC countries in order to achieve security and stability for the region’s people. (Arab Times)
SAR 100 billion for PIF
Saudi Arabia’s King approved the allocation of SAR 100 billion ($26.67 billion) from Saudi Arabia’s reserves to the Public Investment Fund (PIF). The funds will be used to support both foreign and local investments and diversify the investment portfolio.
PIF explained that, according to its investment strategy, it will focus on a number of opportunities in the domestic and international markets, particularly some expected high yields opportunities in the local market that supports private sector investments and promotes economic growth and local content.
Such investments are expected to have a positive impact on the overall investment revenues and the diversification of the national income resources as well, PIF’s spokesperson said.
Economic reforms in Saudi Arabia include launching new projects for which more financing was injected into the PIF to finance development projects in the country, from $160 billion to about $2 trillion by transferring assets. The move was made after a recommendation from the Council of Economic Affairs and Development.
The intention is to diversify investments of the fund and improve revenues from its portfolio.
The fund said it will focus on opportunities in the domestic and international markets, although no timeframes were given. Yet, the focus remains on local projects to reduce Saudi Arabia’s reliance on oil exports
PIF is expected to focus on “some expected high yields opportunities in the local market that supports the private sector investments and promote economic growth”.
Saudi Women Entrepreneurs
Effat University in Jeddah held The Women’s Entrepreneurship Day (WED) which focused on Saudi Vision 2030 goals. Sofana Dahlan, CEO and founder of Tashkeil, who is also WED ambassador to Saudi Arabia, said that entrepreneurship is something that is still in the process of growth, and we need to open the door for dialogue to discuss and address the challenges faced by our entrepreneurs.
Mohammed Hakeem, associate professor at the University of Jeddah, who was the master of ceremonies, said: “We see today Saudi female entrepreneurs who have been meeting the challenges; we need to listen to them, share their concerns and stories of success, and benefit from their experiences. One of the goals of Saudi Vision 2030 is to strengthen and enrich women’s entrepreneurship.”
In the past, the common culture of entrepreneurship in Saudi Arabia was revolving around the people who had their own trade and those who were working in the field of Haj and Umrah. However, times have changed now.
Ghassan Al-Sulaiman, governor of the newly formed Small and Medium Enterprises Authority said: “Entrepreneurship is an essential empowerment for women more than the labour market, where their participation in enterprises in the first world countries is more than the labour market.”
The forum included six panel discussions with more than 30 activists in the field of entrepreneurship addressing the current cultural changes in Saudi Arabia and how it impacts female entrepreneurs, the different types of support extended by the government and private sectors for entrepreneurs, the role of educational institutions in aspiring and empowering potential female entrepreneurs, challenges facing them in accessing financial channels to fund their projects, and the role of government and policy-making bodies in enabling entrepreneurs in Saudi Arabia.
Al-Sulaiman had noted that his authority working on providing a definition for the small and medium enterprises which they will issue within two weeks.
SMEs contribute some SR600 billion to the GDP and this number has to increase by four times to meet the 2030 Vision.
Saudi banks have helped facilitate funds exceeding SR17 billion to more than 8,500 small and medium-sized enterprises (SMEs) under the Kafala program.
The program aims to promote financial support for Saudi SMEs, said Talat Zaki Hafiz, secretary-general of the media and banking awareness committee at Saudi Banks.
The Ministry of Health plans to offer health services through state-owned companies competing with each other and with service providers from the private sector, to improve quality and increase productivity, which is the first step in preparation for privatization at the end of the day, according to 2030 vision.
The ministry said that it will achieve that vision in stages, as will those steps to separate health services (276 hospitals and 2,300 health centers) for the ministry, and the offensive mission of its supervisory role and oversight. It is planned to establish holding companies that in turn 20 to 30 subsidiaries all over Saudi Arabia, every company having a specific number of hospitals and health centers are organized in a manner which ensures universality and consistency of services, and managed in a way the private sector aimed at increasing efficiency and productivity and the level of services. The ministry explained that it would not do so without the active participation of the local and international private sector companies, and this is in response to one of the objectives with the participation of the private sector comes.
The ministry spokesman also said that, over the next five years, there will be a lot of service providers to companies, and the will start by converting to a non-profit company.
In the same context, he explained that privatization will increase the effectiveness of public hospitals, to stop the waste, and improvement of health services to be provided to patients, and expected to be the allocation mechanism for the contribution of the beneficiary of the service, by paying a small fee treatment for workers in the public and private sector, while the group is capable of State will secure insurance policies, through some health programs, as a program of medical care, and care program to help the US, ruling that at least spending on health services of high therapeutic value.
Dr Qari of the ministry called for work to study the subject careful consideration, before initiating the start, through the transfer of international experiences of the states, in the run-up to the same subject.
Budget Deficit 9.5%
The head of the International Monetary Fund forecast improvement in Saudi Arabia’s oil revenues for next year, with price increases and adjusted spending. Key fact for this progress are measurements taken by the government to reduce the budget deficit which have fallen to 13% compared to 16% last year.
Bloomberg predicted that the deficit will fall next year to just 9.5%, in case oil revenues reach $60 per barrel. Paying back contractors to raise spending during the fourth quarter of this year is a motivator for the market.
SAR 342 billion Debt
Saudi Arabia’s public debt has reached SAR 342.4 billion, according to a report of the Debt Management Office (DMO) at the Ministry of Finance.
In September, the total was SAR 97 billion, in addition to $10 billion (SAR 37.5 billion) international syndicated loans arranged in May 2016, and $17.5 billion (SAR 65.6 billion) in terms of international bonds issued in October 2016, bringing to SAR 200.1 billion the total local and international debts issued in 2016, the Saudi Press Agency reported.
The DMO emphasized that the ministry will resume the local debt issuances during the fiscal year of 2017. It is also working on the development of the primary debt market, diversification of debt instruments through issuing local and international Shari’ah compliant sukuk (Islamic bond), and contribute to develop the secondary debt market through registering and listing the local debt instruments in the Saudi Stock Exchange (Tadawul).
This is part of the DMO’s objective to update and develop the Kingdom’s overall strategy and plan pertaining to public debt, the report pointed out.
Saudi Water Plant Investments
Environment, Water and Agriculture Minister Abdul Rahman Al-Fadli says that the volume of desalinated water produced in Saudi Arabia will be doubled during the next 15 years to cater to the growing demand.
Currently production lies at 4.6 million of cubic meters of desalinated water daily from its 29 desalination plants around the country.
Saudi Arabia will need more than $53 billion in water sector investment supported by private funds as demand grows. “Future plants will be tendered to the private sector,” Ali Al-Hazmi, the Saline Water Conversion Corporation’s (SWCC) governor, told the Water Investment Forum in Riyadh this week.
Saudi water demand is increasing by more than five percent annually. Saudi Arabia obtains most of its water from desalination and the rest from ground sources. “This requires a lot of money and a lot of capital investment,” Mansour Al-Mushaiti, a deputy minister with the Ministry of Environment, Water and Agriculture, told the forum. “We are envisaging that the capital requirements in the next five years will reach up to SR200 billion ($53.3 billion),” AFP quoted him as saying.
More Phosphate in 2017
Saudi Arabian Mining Co. (Maaden) will ramp up production of phosphate from its new Waad Al-Shamal facility by mid-2017 “Construction will be completed by the end of this year and, starting next year, we will begin production ramp up on a staggered basis to reach full capacity,” CEO Khalid Al-Mudaifer said at the company’s headquarters in Ras Al-Khair.
This additional capacity will make Maaden the world’s third largest phosphate producer. Once at full capacity in 2019, the complex will double Saudi Arabia’s production of phosphate, used as a fertilizer, to 6 million tons a year — putting it joint-sixth globally, according to 2014 estimated production data from the US Geological Survey.
The mining sector is one way to alleviate the damage that the slump in oil prices. Waad Al-Shamal is part of an ambitious industrial scheme aimed at opening up Saudi Arabia’s north to development that will boost job creation.
The company “will have their own phosphate rock source, ammonia source, and have cheap access to sulphur, the three key ingredients for phosphate fertilizers. This will make them the lowest cost producer in the world,” Chris Lawson, senior consultant, head of phosphate analysis at CRU Group said.
Competition will come from Morocco and others. The Saudi projects market is well-placed to supply India and East Africa and worked to increase its shares in other markets, among them the small growing East Africa fertilizer market.
Saudi authorities estimate the region holds 500 million tons of phosphate ore, around 7 percent of global proven reserves, mainly in the Al Jalamid and Umm Wu’al areas between Arar and Turaif.
Mudaifer said these reserves, while high quality, were among the least exploited globally because of lack of infrastructure.
But now unconventional gas in the area is being harnessed for the first time, power comes from a plant built by Saudi Electricity Co, and a railway links Waad Al-Shamal to Ras Al-Khair.
Around SR28 billion has been invested on the project, under the umbrella of Wa’ad Al-Shamal Phosphate Company (MWSPC), a venture between Maaden, Mosaic and the Saudi Basic Industries Corp. (SABIC).
“We have plans to grow (but) it will be subject to the market being ready to absorb the additional quantity,” Al-Mudaifer said of the company’s ambitions.
Ras Al-Khair is already home to a Maaden phosphate venture with SABIC, Maaden Phosphate Company and has since its start in 2011, produced three million tons of diammoniate phosphate (DAP) annually.
“Ras Al-Khair is the anchor of the Saudi mining sector and as such it will play a significant role in the economic diversification of the Saudi economy,” he added.
Ras Al-Khair, a $35 billion multi commodity minerals hub located in the Eastern Province, has been an ongoing initiative for over 10 years.
Saudi Week: 45 Hours Work
A survey by the Public Powers for the third quarter of 2016 showed that the average working week in Saudi Arabia is 45 hours, 5 working days a week in all Saudi sectors.
Least in terms of the number of working hours came the education sector, by about 35.2 hours a week, with 1.3 million employees.
Second came agriculture, forestry and fishing with 42.5 hours, followed by mining at 44.5 hours, and manufacturing with 48.2 hours. The supply of electricity, gas, steam and air conditioning is 41.8 hours a week, while water supply and the activities of sewage and waste management and treatment have the number of weekly hours at 43.4.
Higher in comparison were working hours in the households which are used individually or in the production of goods and services is especially distinctive about 50.8 hours, the activities of foreign organizations and bodies 40.1 hours, the wholesale and retail trade and repair of motor vehicles and motorcycles by about 50.9 hours per week.
There has been a 12.17 percent increase in the number of expatriates, according to the General Authority for Statistics (GAS) third quarter survey for this year.
The number of expatriates in the Kingdom reached 11.6 million by mid-2016. In 2015 there were 10.2 million expats in the Kingdom. A total of 1,419,905 expatriates from various parts of the world arrived in the Kingdom this year, according to GAS data.
The number of female expatriates has increased by about 13.59 percent this year reaching 3,657,643 witnessing a rise of 497,256 over their number the previous year which was 3,160,387. The number of expatriate men increased by 922,649 in 2016.
Expatriate men at present stand at 8.3 million compared to their number in 2015 which was 7.8 million.
The number of Saudi men and women declined by 693,324 in 2016 reaching 20.7 million from 20.8 million in 2015.
The number of Saudi women decreased by 353,245 at the rate of 3.46 percent going down to 9.8 million in mid-2016 from 10.2 million the same time last year.
Expatriates are occupying 72 percent of jobs in the tourism and hospitality sector against 28 percent Saudis.
The GAS survey showed that the number of unemployed Saudi citizens reached 693,784, of them 254,108 were men and 439,676 women.
The results indicate that the highest rate of unemployment among Saudis was among those who are between 25 years and 29 years of age, i.e. 39 percent of the total unemployed Saudi nationals.
Freezing at -3
Residents in parts of Saudi Arabia woke up this week to blankets of snow.
According to The Sun, plunging temperatures saw the arid desert land turned into a bizarre one-day winter landscape, as freezing conditions quickly took over.
Snow covered the sand in central and north-western regions of the Saudi Arabia as a rare cold snap saw temperatures dropped to -3 Celsius.
Despite November being considered the ‘cold season’ in Saudi Arabia, temperatures are still expected to reach a normal 27 degrees Celsius in the coming week. Excited citizens spread snowmen photos to social media.
The freezing temperatures and the snow are totally unexpected for the central and north-western regions of Saudi Arabia because during this period the temperatures rarely drop below 20 degrees.
Drivers in Saudi Arabia are not used to these shocking conditions, with many dumping their cars at the side of the road as they failed to make it through the drifts.
This isn’t the first time Saudis have gone a little different in winter. A man was filmed somersaulting into the snow, only to get his head stuck, in 2013 after snow fell on the country.
The dunes were covered in snow after a cold wave moved over the whole country.
In just four hours, a significant layer of snow had settled on the golden sands.
Guantanamo prisoner not happy with Saudi rehab program
An Al Qaeda operative told a parole board at Guantanamo Bay that a Saudi reform program for terrorists is actually a front for recruiting jihadists, according to declassified documents.
Ghassan Abdullah al-Sharbi said the program at the Prince Mohammed bin Naif Counselling and Care Center, which was thought to have played a key role in Saudi Arabia’s counter-terrorism strategy, is not what it appears to be.
Dozens of Guantanamo detainees, including Osama bin Laden’s former bodyguard, have been sent through to the program as a condition of their release as President Obama hopes to close the prison before he leaves office.
The center, which includes activities like swimming, ping-pong, and art therapy, has been compared to a holiday resort, and those who complete the 12-step program are rewarded with young brides and new cars, the New York Post reported.
“Dozens of Guantanamo detainees have been sent through to the program as a condition for their release. Programs include art therapy” classes. According to the Post, 134 Saudi detainees have been sent to the rehab centers in Riyadh and Jeddah.
The facilities are meant to help former jihadists integrate into society, with psychologists on hand to determine problematic social factors while religious officials are there to clarify ideologies, according to the New York Times.
Those who are sent to the center also said to have access to a PlayStation, gourmet meals, and private apartments for conjugal visits.
But Al-Sharbi told the parole board: “You guys want to send me back to Saudi Arabia because you believe there is a de-radicalization program, on the surface, true. You are 100 per cent right, there is a strong de-radicalization program, but make no mistake, underneath there is a hidden radicalization program.”
Al-Sharbi, who faced the Periodic Review Board after 14 years, said he did not want to enrol in the 12-step rehab program fearing he would be “used” to “fight under the Saudi royal cloak.”
He said: “When they release you they want to make sure that you’re still under that cloak and they got you to fight their jihad in their regions and in the States.”
“The facilities are meant to help former jihadists integrate into society, with psychologists and religious officials on hand. They will proudly tell you they will fight terrorism. That means they will support it.”
He also added that fighters are being recruited and trained to face off against Iranians in Yemen and Syria.
Earlier this year, the Periodic Review Board, created under Obama’s administration in 2011, agreed to release Muhammed Al Shumrani after his lawyers argued that enrolling him in the rehab program would help.
About 20 per cent of those who enrol in the rehab program return to terrorism, the Post reported.
(News Item taken from Arab News, Al Awatan Arab Times, Mail Online, Saudi Gazette, Sabq)