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January 16, 2018

Decoding the oil deal

More questions than answers from Bassil-Berri meeting

Parliament Speaker Nabih Berri is having trouble making up his mind. Or so it seems. On July 1, Berri and Foreign Minister Gebran Bassil struck an unexpected deal. The agreement was touted as a bulldozer clearing the final barrier that, for over three years, has blocked the conclusion of Lebanon’s first offshore oil and gas licensing round. The parties, however, have chosen a very odd strategy for building national consensus around their deal. By all accounts, they haven’t shared the details widely, and the terms of the deal coming from the speaker’s side vary depending on what you read. At the time of writing, this looks more like a media stunt than a news development.

Coming to terms

The search for oil and gas under Lebanese territory began before the territory was technically Lebanese. Some five years prior to Lebanon’s 1943 declaration of independence, the Iraq Petroleum Company drilled an onshore well. The company did not make any discoveries, but the search continued (both via drilling and surveying) until the early 1970s. In 1993, the government again began looking for hydrocarbons, commissioning a two-dimensional (2-D) seismic survey off the coast of Tripoli, in the north. Since then, oil stayed on politicians’ brains, but movement has typically been slow, with one exception: Najib Miqati’s 2011-2013 cabinet. With a newly minted offshore hydrocarbon law on the books, then-Energy Minister Bassil clearly made the creation of a Lebanese oil and gas sector a top priority, and the cabinet largely backed him.

Since 2013, it has been quite clear that one of the biggest barriers to getting the decrees passed lies in a disagreement involving Berri

In December 2012, after securing the cabinet’s approval, Bassil announced the appointment of six board members for the Lebanese Petroleum Administration (LPA), a regulator for the sector, which the 2010 offshore law called for. [By way of contrast, an electricity sector regulator called for in a 2002 law remains ink on paper to this day.] In February 2013 – only 80 days after its board was appointed – the LPA opened a pre-qualification round to select which international oil and gas companies would be allowed to bid in the first licensing round. The pre-qualification process went as planned, and in April 2013, 46 companies were given the green light to participate in the round, scheduled to open the following month. There was only one problem. Miqati had resigned at the end of March before much-needed work on oil and gas was finished. Most pressing were two decrees needed for the licensing round (one delineates Lebanon’s offshore blocks and the other includes a model contract to be signed between the state and companies keen to drill as well as details on how the bidding will happen and how offers will be evaluated). Shortly after Prime Minister Tammam Salam formed a government in February 2014, he tasked a ministerial committee with studying the decrees. They have yet to be approved.

Since 2013, it has been quite clear that one of the biggest barriers to getting the decrees passed lies in a disagreement involving Berri. The speaker wanted to open all ten blocks for bidding. The LPA, meanwhile, recommended opening only five, a position Bassil supported. In either scenario, fewer contracts would be signed than blocks put on offer. Announcing the Berri-Bassil deal, neither Bassil nor Berri’s confidant, Finance Minister Ali Hassan Khalil, mentioned anything about which blocks to open for bids. Speaking to Executive two weeks after the deal was done, Cesar Abi Khalil, a former Bassil advisor (currently counseling Energy Minister Arthur Nazarian), at first reads an amended version of the statement issued after the Berri-Bassil meeting.

“There has been an agreement on [an offshore oil and gas] licensing strategy,” Abi Khalil says. “The licensing strategy should ensure Lebanon’s rights to resources in our subsea, first [vis-à-vis] Israel, second Cyprus and Syria. It should ensure that the Lebanese government will maximize its profit from petroleum activities, and it will ensure the right environment for the licensing round to succeed.” Neither foreign nor finance ministers mentioned “licensing strategy” in their July 1 announcement. Even with that added detail, however, the deal still sounds vague. (Which party would agree to ceding Lebanon’s rights, minimizing the state’s take from potential resources and having an unsuccessful licensing round?) Indeed, Executive’s first question to Abi Khalil was: “So what does that all mean?”

“I think this is clear. This is the extent of the statement,” Abi Khalil replies, before elaborating diplomatically that Berri agreed to abandon an idea he had been promoting for about three years. The actual deal, Abi Khalil says, calls for opening fewer than ten blocks to bidding in the first licensing round.

Reading the tea leaves

Executive was unable to reach Speaker Berri or anyone who could answer questions on his behalf. On July 9, The Daily Star reported Berri had convinced Bassil to accept opening all ten blocks, the opposite of what Abi Khalil says the deal entails. On July 22, economist Marwan Iskandar wrote in An Nahar that the Speaker told him personally that the deal meant going with the LPA’s strategy of opening fewer than ten blocks, seemingly confirming what Abi Khalil says. Yet that same day, Al Arabiya English ran a piece again claiming the Speaker’s vision of offering all ten blocks had won the day.

Future Movement MP Mohammad Kabbani, who heads the parliamentary committee which deals with oil and gas, explains that his party has not been explicitly briefed on the deal since it was struck, but says his party is on board. “We have agreed to submitting ten blocks for licensing and signing only a few contracts. If this is the real agreement,” he says. According to Abi Khalil, that is not the deal, which seems to throw into question whether or not Future will accept it. Abi Khalil has not responded to follow up questions on why confusion and misinformation seems to be how the parties are communicating their deal.

Why now?

Putting aside the details of the deal for a second, Kabbani and Lebanese Forces MP Joseph Maalouf offered some insight as to why the deal came when it did. For three years now, Berri has been claiming that Israel is stealing Lebanon’s gas. He has never offered proof and the concept always seemed suspect on technical grounds. Lebanon’s neighbor has discovered gas in its offshore acreage. None of those discoveries stretch into Lebanese waters. Therefore, if Israel were truly stealing, the private company doing the actual drilling would have to employ expensive technology to drill past the Israeli fields on a blind, subsea search for Lebanese fields to the north. Not only is this costly and risky (i.e., no guarantee a Lebanese field would be found), if the private company were caught doing so, its reputation would be in the toilet at the very least. The only other way for Israel to steal Lebanon’s gas would be if the two countries shared a reserve and Israel began exploiting it first without agreeing how to split profits with Lebanon. Shared reserves are not uncommon (Iran and Qatar share the world’s largest gas field). None have yet been discovered between Israel and Lebanon. However, new data suggest the two countries may have a shared reservoir. This new data, coupled with fears that an Israel-Turkey reconciliation announced in late June means Israeli gas may soon reach a hungry European market via a pipeline to Turkey, prompted the oil deal, Maalouf and Kabbani say.

Walid Nasr, head of strategic planning at the LPA, refuses to comment on the political deal, but sheds light on the new data. Echoing Kabbani and Maalouf, he explains that in 2002, an American company called TGS conducted seismic surveys of Lebanon’s offshore. The company refused to give the Lebanese government the data back then, Nasr says, because the two did not have a written contract, only an oral agreement between the company and the then-minister of energy. Bassil sued in 2011, and TGS handed the data over recently, Nasr explains. TGS refuses to comment in an email exchange with Executive, but a paper on the company’s website confirms it shot over 2,000 kilometers of 2-D seismic in Lebanon’s offshore in 2002. Interestingly, the map published along with the paper seems to show that Lebanon’s seismic surveys stretch south into Israel’s offshore. Nasr says the interpreted data suggests Lebanon and Israel may have a shared hydrocarbon reservoir (2-D seismic cannot distinguish between oil and gas). Seismic surveys, however, are not perfect tools. They give indications of where oil and/or gas might be. Only drilling confirms what lies below, meaning what today looks like shared resources could prove to be nothing.

Unfinished business

Immediately after the deal, press reports claiming the decrees would be passed imminently were rife. Yet a number of decisions still need to be made. While Abi Khalil insists Berri pivoted from wanting to open all ten blocks for bidding, he admits the exact number was not decided on. Indeed, he repeatedly says “we have no religion” in the matter when asked if the LPA’s strategy of offering five will be the final strategy. Ditto the number of contracts to be signed. Fewer than the number of blocks offered, but how many? “We have no religion in this matter,” Abi Khalil repeats. Finally, given that the pre-qualification round happened three years ago, might another be necessary if some pre-qualified companies have lost interest in bidding or if new companies are eager to invest? Khalil says a second pre-qualification round could be a good idea, but insists his side has “no religion in the matter.” Where and how these remaining points open to negotiation will be discussed is unclear. Prime Minister Tammam Salam has not called for a meeting of the oil and gas ministerial committee to discuss recent developments. Nor has he put the oil and gas decrees on the cabinet’s agenda. In fact, he’s done little more than offer veiled criticism of how the deal was announced. During the July 1 press conference, when a reporter asked Bassil for details, he said that was not important at this stage as the two sides would now begin briefing others to build consensus. If such a roadshow is happening, it is one of the best kept secrets in Lebanon.

Source:http://www.executive-magazine.com/economics-policy/decoding-the-oil-deal

January 16, 2018January 16, 2018

Missed opportunities in Lebanon’s industrial sector

Economic complexity indicators show export potentials

Lebanon’s productive sectors have been undermined since the end of the civil war in 1990. Like other marginalized sectors, the industrial sector has weakened, becoming a smaller proportion of the economy due in no small part to a history of missed development opportunities. To put this in perspective, the share of the industrial sector out of total GDP has decreased steadily from 24 percent in 1997 to 14 percent in 2016.

Not unrelated to this, Lebanon continues to register the worst trade deficit in the region, primarily due to its dependency on imports and weak export channels. The trade deficit, $15.65 billion by December 2016, has recorded a 3.56 percent yearly increase (according to BLOMINVEST Bank figures). Exports have also fluctuated in recent years from $4.49 billion in 2008, up to $5.11 billion in 2012, and then down to $2.44 billion in 2015. Development in the industrial sector has been restricted by limited development in industrial policy, limited electricity coverage, and the high cost of production, as well as the effects stemming from the conflict in Syria. The latter has had a clear effect, reducing investments in the country and making exports more expensive by curtailing Lebanon’s sole land export route to the region.

Potential for sophistication

Despite this seemingly pessimistic picture, looking at microdata through product space mapping suggests that the situation has not been so dismal. Between 2000 and 2008, the Lebanese industrial sector managed to recover, with exports increasing of industrial products from $742 million in 2000 to $2.58 billion in 2008. This steady increase has been accompanied with an increased level of export sophistication, made clear by observing Lebanon’s improved position on the product space. The total number of exported products increased from 898 in 2000 to 978 in 2008. Equally importantly, comparing the distribution of these products, the number of core products increased by 21 percent (from 307 in 2000 to 370 in 2008), while the number of periphery products increased by only 3 percent (from 591 products in 2000 to 608 in 2008), reflecting an increase in the sophistication of Lebanese exports.

Most stark, however, is that 40 out of the 52 newly produced products in 2008 were a result of “long jumps.” Among these are ceramics, glass pigments, opacifiers, colors, and enamels (HS: 3207), shavers and hair clippers (HS: 8510), and base metal fittings for furniture, doors, and cars (HS: 8302). A long jump suggests that new items were produced despite the lack of prerequisite knowledge or capabilities, given data gathered from the existing export basket. Literature suggests that such phenomena are observed in countries that have undergone structural economic changes. In this respect, Lebanon presents an anomaly to the theory. Despite the absence of a government-led strategy to support industrial growth, the sector managed to improve its industrial standing by producing highly sophisticated products between 2000 and 2008.

Lebanon’s favorable demand shocks

To better understand export diversification in Lebanon, while taking into account highly sophisticated domains of production and an absence of a policy-driven structural change, the literature has attributed changes in sophistication levels in different countries to two key causes: A productivity shock or a demand shock. As Lebanese firms continue to suffer burdensome costs of production and a lack of adequate skills, the increase in Lebanese export sophistication has been largely driven by demand shocks, i.e. the discovery of new markets. The fact that local market capacity is small and saturated impels producers who are aspiring to expand and diversify their production to be outward looking. Lebanese firms, therefore, benefit from their experience, entrepreneurial skills, and connections with foreign markets to overcome demand uncertainties. From 2000 to 2008, for example, several free trade agreements were signed between Lebanon and foreign countries or trade associations such as GAFTA (Greater Arab Free Trade Area). This agreement has instigated a spike in the volume of exports, as exporters were responsive to increased demand opportunities in Arab States.

Sustaining a positive sophistication surge?

Despite the optimistic period from 2000 to 2008 that signaled a positive wave of industrialization in Lebanon, the lack of government support and the absence of a productivity shock to supplement the demand shock made it difficult for industrialists to sustain a comparative advantage. Additionally, Lebanon’s position on the product space worsened with a drop in total products exported from 978 in 2008 to 896 in 2015. From 2008 to 2015, Lebanon discontinued the production of 82 products previously conquered in 2008. These are interpreted as missed opportunities that warrant special attention, as they might hint to the presence of market failures.

The surge in sophistication from 2000 to 2008 is comparable to the status of the sector pre-war period. In the 1960s and 1970s, the industry faced a similar boom, but had also failed to further develop, namely due to a lack of adequate supportive policies. For example, in 1975, the Lebanese industrial sector had conquered five out of the ten densest products. Accordingly, the level of capabilities in the economy, measured by the Economic Complexity Index (ECI), was highest in 1968. Lebanon’s rank peaked in 1975, when it was ranked 21st in the world. After that, the country’s economic complexity followed an overall declining trend, where it reached a low level of 44th in the world in 1998. By 2008, the country’s rank again improved to 31st worldwide.

Sector-specific industrial strategy

With a history of missed development opportunities, Lebanon needs a supportive industrial policy that is capable of optimizing on industrialization opportunities. This strategy is key to the development of the country in order to produce highly sophisticated jobs and avoid brain drain. Using the product space as a compass, policy makers should tailor specific initiatives that usher in the production of sophisticated products where Lebanon has a clear comparative advantage. One avenue to formulate and implement such policies is through a sustainable mechanism of public-private dialogue (PPD) that increases accountability and transparency of those efforts and processes aimed at enhancing Lebanese industry.

To this end, the Lebanese Center for Policy Studies (LCPS) is convening roundtables to facilitate public-private dialogue between the Ministry of Industry and the Association of Lebanese Industrialists (ALI). LCPS uses evidence-based research to encourage industrialists and policy makers to move beyond narrow transactional concerns to broader issues and opportunities for policy change, export-oriented growth, and institutional reform. This has and continues to allow dialogue participants to better understand which and what mix of specific legal frameworks, regulatory rules, labor training services, market access rules, and infrastructure can significantly promote economic diversification within highly sophistication domains of production.

Source:http://www.executive-magazine.com/economics-policy/missed-opportunities-in-lebanons-industrial-sector

January 8, 2018

Technip lands $4.2bn Bahrain refinery contract

Contract will extend production capacity at the site on Sitra island from a current 267,000 to 360,000 barrels per day.

A consortium led by France-US petroleum services group TechnipFMC has secured a $4.2 billion (3.5 billion euro) contract to extend capacity at Bahrain’s Sitra refinery, the company said Monday.

The contract, awarded by Bahrain Petroleum Company (Bapco), will extend production capacity at the site on Sitra island in the Gulf of Bahrain from a current 267,000 to 360,000 barrels per day, TechnipFMC said.

The refinery exports some 95 percent of its current production, mainly to India and the Far East.

The consortium includes South Korea’s refinery and electrical plants designer Samsung Engineering as well as Spanish petroleum engineering firm Tecnicas Reunidas, TechnipFMC said, adding construction should be completed by 2022.

Nello Uccelletti, head of Onshore Offshore activity at TechnipFMC, hailed the “prestigious” contract as being a “testimonial of the long-term partnership with Bapco and strengthen(ing) our leadership in the refining sector.”

Bahrain was the first Arab Gulf state to produce oil, in 1932, but its reserves have all but dried up and the Sunni Muslim kingdom depends primarily on the Abu Safa field it shares with Saudi Arabia for its own supplies which are pumped via a 230,000 bpd capacity subsea pipeline.

Source:http://www.arabianbusiness.com/industries/energy/384864-technip-lands-42bn-bahrain-refinery-contract

January 8, 2018

OPEC said to agree oil output cuts extension to end-2018

Sources say talks are now getting underway with Russia and other partners to bring them on board.

OPEC agreed to extend its oil-production cuts to the end of 2018, subject to a review at its next scheduled meeting in June, according to delegates gathered in Vienna.

With OPEC’s initial meeting concluded, talks are now getting under way with Russia and other partners to bring them on board. Ministers also proposed including Nigeria and Libya in the agreement for the first time by imposing caps above their current production, delegates said, asking not to be named discussing closed-door negotiations.

The outcome of the day’s talks so far reflects a rare consensus between members of the Organization of Petroleum Exporting Countries, with all agreeing that the market is moving in the right direction, but is not yet balanced. While Moscow has voiced its support for an extension, it is said to want assurances on how and when the agreement will be phased out.

“OPEC ministers have very clearly said that they’re extremely committed towards getting that inventory overhang down,” Amrita Sen, chief oil analyst at consultants Energy Aspects Ltd in London, said in an interview with Bloomberg Television. “The questions that are going to get asked now are about Russia’s involvement, which I also think is going to be very much for the full year.”

For Russia, reassurance about how the curbs will eventually be wound down seems to be as important as the duration of the extension, according to people involved in negotiations earlier this week. It needs greater clarity than most OPEC members because its economic policy making is more complex, including a floating exchange rate that fluctuates with the oil price.

It’s premature to talk about an exit strategy because OPEC and its allies are relying on oil demand in the third quarter of 2018 to finally eliminate the inventory surplus, Saudi Oil Minister Khalid Al-Falih said Thursday before the meeting. But the kingdom is open to discussions about how the group could wind down the cuts “very gradually” once its goals are achieved, he said.

Benchmark Brent crude traded up 0.6 percent at $63.49 a barrel at 3:36pm in London, paring earlier gains of 1.7 percent.

Nigeria, an OPEC member currently exempt from production cuts, is willing to comply with a request to cap its oil output at 1.8 million barrels a day, while Libya has yet to decide, delegates said. Kuwaiti Energy Minister Issam Almarzooq said before the meeting that Libya was asked to limit output to about 1 million barrels a day.

Those quotas would be above the countries’ current production, with Nigeria pumping 1.73 million barrels a day in October and Libya 980,000 a day, according to data compiled by Bloomberg.

Source:http://www.arabianbusiness.com/industries/energy/384706-opec-said-to-agree-oil-output-cuts-extension-to-end-2018

January 8, 2018January 8, 2018

Bahrain wins $200m boost to manufacturing sector

More than $200 million worth of investment into Bahrain’s manufacturing and logistics sector was attracted in the first half of this year, according to the Bahrain Economic Development Board (EDB).

It said the investments are expected to create approximately 1,000 jobs over the next three years in the Gulf kingdom.

The growth follows a substantial increase in the number of international businesses looking to use Bahrain as a hub to access and seize the regional opportunities offered in the GCC market and beyond, the EDB said in a statement.

Mondelez International, one of the world’s largest snacks companies, is building a biscuit production plant that will produce the famous brands Oreo, Ritz and TUC.

The plant, which will generate 200 jobs in its initial phase, represents the second investment by Mondelez in Bahrain in less than 10 years.

Both investments by Mondelez are located at Bahrain International Investment Park (BIIP).

EDB also said GCC textile and fashion distribution company Armada Group has recently begun construction of its regional distribution centre in the Bahrain Logistics Zone (BLZ), investing over $50 million and creating 400 direct jobs over the next three years for locals.

Other important investments this year include ECU Worldwide, SMSA Express, Elsewedy Electric, Mennekes, Sonmez Metal, Tsinx Environment Technology, Almajdouie Holding, Lals Group, as well as expansion investments by several companies including Kuehne + Nagel, Sandvik, and Agility Logistics.

Bahrain’s manufacturing, transportation and logistics sector is currently one of the largest contributors to the country’s GDP, and accounted for 20.3 percent of 2016 GDP.

Khalid Al Rumaihi, chief executive of the EDB, said: “The economic transformation taking place in the GCC is creating exciting opportunities for manufacturing companies – and we are delighted that many are choosing Bahrain as a location from which to access them.

“Further investments, such as the ongoing modernisation and expansion of Bahrain International Airport, the building of a second causeway to Saudi Arabia and additional regulatory reforms are expected to make it even easier for businesses looking to access the region from Bahrain and we look forward to welcoming more firms in the coming years.”

Source :http://www.arabianbusiness.com/industries/banking-finance/381629-bahrain-wins-200m-boost-to-manufacturing-sector

January 5, 2018

New Competition for Libyan Entrepreneurs

I. Competition format:

1. Deadline: 12:00 PM US ET on December 28, 2017 Online applications submitted.
2. January 2018: Applications reviewed by GIST Tech-I Alumni Mentors.
3. January/February 2018: Three applications from each Alumni Mentor will be voted on by the online global public.
4. April 16-19, 2018: Finalists attend the Global Entrepreneurship Congress.
5. April 16, 2018: Finalists pitch in front of judges for seed capital prizes.
6. April 2018: Finalists travel all-expenses paid to Turkey for one-day of in-person training.

II. Competition Overview:

The GIST Technology Idea (Tech-I) Competition is an annual competition for science and technology (S&T) entrepreneurs from 136 emerging economies around the world. The competition is part of the Global Innovation through Science and Technology (GIST) initiative, led by the U.S. Department of State. The GIST Tech-I Competition is implemented by the American Association for the Advancement of Science (AAAS). This year, the competition will challenge former GIST Tech-I finalists (GIST Tech-I Alumni) to lead and mentor the next generation of tech entrepreneurs in their countries and regions. A select group of GIST Tech-I Alumni, called Alumni Mentors, will solicit and help select science and technology entrepreneurs with either an idea or startup in their region to join them at the 2018 Global Entrepreneurship Congress (GEC) in Istanbul, Turkey to pitch their idea or startup.

GIST Tech-I Alumni Mentors will solicit applications from new science and technology entrepreneurs globally to participate in the GIST Tech-I Competition over a month-long application period. At the end of that month, Alumni Mentors will review the submitted applications and nominate to AAAS three top applicants as semi-finalists to enter a voting phase.

Semi-finalists will participate in online public voting on GISTNetwork.org to determine which will go on as finalists. The ten semi-finalists that receive the top voting totals, and the GIST Tech-I Alumni Mentors who solicited those applications will go to the GIST Tech-I Finals where they will receive training, attend GEC, and have the opportunity to pitch their idea or startup to win capital seed funds.

III. Eligibility Requirements for Applicant

Applicants must meet ALL of the following eligibility requirements:

1. The applicant must be 18-40 years old on the application deadline, December 28, 2017.
2. The applicant must be a Libyan citizen.
3. The applicant must not hold dual-citizenship or permanent resident status in a non-GIST economy.
4. The applicant must not submit more than one application per GIST Tech-I competition year.
5. The applicant must not be a previous GIST Tech-I finalist who traveled to and competed in the GIST Tech-I Finals at GES.

In addition to meeting the applicant requirements above, applications must to be for Ideas or Startups that met ALL of the following requirements:

1. The application must be the original work of the Idea or Startup applicant.
2. The Idea or Startup must be developing an innovative science or technology solution with market potential in a GIST-eligible economy.
3. The Idea or Startup must be for-profit. Applications from non-profit ventures or NGOs are not eligible and will not be reviewed.
4. The Startup must be less than three years old.
5. The Idea or Startup must be, at least in part based, in a GIST-eligible economy.
6. The Idea or Startup must be developing or selling products and services that use its own innovations in science and technology. Applications from organizations that buy and resell technologies will not be reviewed.
7. The Idea or Startup must not submit more than one application per GIST Tech-I competition year.

Do you still have questions about eligibility? Check out this page or contact tech-i@gistnetwork.org

VI.. How to apply?

Prospective applicants will go to GISTNetwork.org to apply

• The applicant will complete a standard application form and will select an Alumni Mentor to work with should they be selected to continue in the competition.
• The GIST Tech-I Application consists of:
o A 100-word short summary of your project, to be used on the public voting website, if your project advances to semifinals. Your short summary must be in English.
o Brief eligibility questions.
o Responses to several questions that address the Judging Criteria listed in section VII here. Each response is limited to 100 to 150-words. All responses must be in English.
o A 90-second pitch video in English or with English subtitles provided. Formats accepted include.MOV, .MPEG4, .MP4, .AVI, .WMV, .MPEGPS, .FLV, .3GPP, and .WebM.
See examples from previous participants on YouTube. All application materials must be submitted through the online portal before the deadline.

Source:http://www.libya-businessnews.com/2017/12/19/new-competition-for-libyan-entrepreneurs/

January 5, 2018

Iran signs €34m Petchem Deal with Italian Firm

Iran’s Ardebil Petrochemical Company cemented a deal with Italy’s engineering and construction giant Techint Group worth 34 million Euros deal for construction of a project aimed at production of propylene from natural gas.

Based on the deal, the Italian company will designate a licensor for a 500,000-ton GTPP or GTOP project in Iran in an 18-month period and then fund the project.

Upon signing the deal, Bahram Shahsavari, head of the board of directors of Ardebil Petrochemical Company, said once the €1.6b project becomes operation, over 1,500 direct jobs and over 10,000 indirect jobs will be generated.

Localization of the technical savvy for construction of the project as well as training of human forces for running such facilities have been stipulated in the contract, he added, highlighting the deal’s top features.

Techint is an Italian-Argentine conglomerate founded in Milan in 1945 by Italian industrialist Agostino Rocca and headquartered in Milan and Buenos Aires.

Source:http://www.iran-bn.com/2017/12/25/iran-signs-e34m-petchem-deal-with-italian-firm/

January 5, 2018

Production surges in Iran’s car industry

Iran’s car industry is the second biggest sector in country after the energy sector accounting for more than 10 percent of its GDP.
Over 700,000 people are working in this industry which is equal to four percent of workforce of Iran, according to the 2015 data.

With a contribution of about $9.1 billion, the country’s carmakers accounted for 2.2 percent of Iran’s economic growth over the last fiscal year (ended March 20, 2016). The automotive industry is projected to form at least four percent of Iran’s economic growth by 2025.

The WB estimates show that Iran’s GDP in 2015 stood at $393.7 billion. This is while Iran’s car industry in 2015 witnessed a downward trend as the industry’s share in the country’s GDP was 0.5 percent lower than in preceding year.

However, the latest statistics on the output of the country’s automotive industry suggest a huge surge. The industry made more than 946,000 vehicles over the first nine months of the current fiscal year — indicating a 38.7-percent growth year-on-year.

A surge was observed in interest among multinational companies in investing in Iran following the nuclear deal signed in January 2015, while one sector attracting attention is Iran’s automotive industry.

Iranian car manufacturers reestablished cooperation with European companies, including Peugeot, Citroen and Renault. This resulted in a strong growth of nearly 151 percent for automotive sector, which ended 2016 as the top performing sector on the Tehran Stock Exchange.

At least two European carmakers had earlier announced that they experienced a considerable surge in their sales in Iran over 2016.

Traditional export markets for Iranian automobiles include Algeria, Azerbaijan, Cameroon, Ghana, Egypt, Iraq, Pakistan, Senegal, Syria, Sudan and Venezuela.

Recently, the Islamic Republic presented certificates to foreign car manufacturers willing to open sales offices in the country.

Some 40 foreign carmakers have already obtained the certificates, while the number can be increased in future. Companies may get licenses facing no limit in terms of the number of cars they would like to import. However, the companies are required to have a 10-year customer services experience in Iran, to be able to sell the production in the market.

The auto giant PSA Peugeot Citroen became the first foreign company since the implementation of the JCPOA to receive a license from the Iranian government to invest in Iran Khodro Co. (IKCO) — the country’s biggest car manufacturer.

The country imported some 49,331 motor cars in March-December 2016, while some 89 percent of the of the figure fell to a share of 5 countries, including the UAE, South Korea, Germany, Spain, Turkey. Imported cars had only a five-percent share in Iran’s total car market in the period.

Source:http://www.iran-daily.com/News/176525.html

January 4, 2018

Qatar’s industrial sector sees robust expansion in September

The economic blockade imposed by the siege countries appears not to have dented Qatar’s industrial sector, which showed robust expansion in September on higher production especially in the hydrocarbons and manufacturing sectors, according to official estimates.

Qatar’s industrial production index (IPI) grew 6.2% month-on-month in September this year mainly on account of production increase in crude and natural gas as well as refined petroleum products and rubber and plastics.

The Ministry of Development Planning and Statistics introduced IPI, a short-term quantitative index that measures the changes in the volume of production of a selected basket of industrial products over a given period with respect to a base period 2013.
On a yearly basis, the country’s IPI showed a 7.4% jump this September primarily on higher production of refined petroleum products, food products, electricity and crude and natural gas.

The mining and quarrying index, which has a relative weight of 83.6%, expanded 8.3% on a monthly basis in September 2017 on the back of a 8.3% rise in extraction of crude petroleum and natural gas; even as there was an 18.3% decline in other mining and quarrying activities.

On a yearly basis, the index showed an 8.2% growth on an 8.3% increase in the extraction of crude and natural gas; whereas other mining and quarrying index slumped 22.1%.

However, the manufacturing index, with a relative weight of 15.2%, showed a 3.1% decline month-on-month in September this year owing to a 9.1% drop in the production of beverages, 7.6% in cement and other non-metallic mineral products, 4.9% in chemicals and chemical products and 3.5% in food products.

Nevertheless, there was a 3.7% increase in the production of refined petroleum products, 2.1% in rubber and plastics products, 0.9% in printing and reproduction of recorded media and 0.2% in basic metals.

On a yearly basis, the manufacturing index rather shot up 3.2% with refined petroleum products’ production soaring 36.1%, food products (23.5%), printing and reproduction of recorded media (7.4%) and basic metals (0.4%); whereas that of cement and other non-metallic mineral products shrank 11.2%, beverages (5.2%), chemicals and chemical products (2%) and rubber and plastics products (1.9%).
Electricity, which has 0.7% weight in the PIP basket, saw a 5.2% decline on a monthly basis but reported 13% expansion on a yearly basis; while in the case of water, which has a 0.5% weight, there was a 4.9% and 6.5% decline month-on-month and year-on-year.

Source:http://www.gulf-times.com/story/571898/Qatar-s-industrial-sector-sees-robust-expansion-in

December 28, 2017

Qatar startups, manufacturing sector gain more govt support

Three months into the Saudi-imposed economic blockade, Qatar startups and the manufacturing sector “are getting more support” from the government, which has laid out a number of self-sufficiency and sustainability-related projects, an official of a Qatari company said.
“As a nation we are aiming to become more self-sufficient; considering the amount of Qatar’s wealth, this goal can be achieved through the wise leadership of His Highness the Emir Sheikh Tamim bin Hamad al-Thani. This will also enable the government to develop areas it had not focused on earlier.

“Today, several new startups are getting a major push from the Qatari government and companies are beginning to invest more in newer projects. So definitely the blockade has acted as a great stimulant for the development of local businesses in Qatar, said Anoop Krishnan, the COO of end-to-end IT solutions provider Cherry Computer.

Prior to the blockade, Krishnan said the market was rife with “freelancers” or unregistered companies that are operating in some Asian and GCC countries. However, increased focus on local companies since June 5 helped considerably trim down the presence of freelancers in the market, “some of which do not even have a physical presence in Qatar,” Krishnan said.

“While there are still some freelancers operating in the market, the focus on local businesses since the blockade was a positive development for companies like us,” Krishnan pointed out.

He also underpinned the role of Qatar’s small and medium-sized enterprise (SME) sector in nation-building and economic development. “Two of the primary roles of the SME sector would be wealth creation and employment generation in the country,” he said.

Krishnan said the development of Qatar’s SME sector will create a spill-over effect on less-developed areas around the country when SMEs start setting up new businesses in less populated locations “to maintain cheaper operating costs.”

“The growth of industries and business in these areas will lead to great infrastructural development like better roads, new schools, hospitals, shopping malls, and other public and private services that would otherwise have taken a different timeframe had there not been a blockade.

“Adding to this is the already developing Qatar Rail project, which is going to interconnect neighbouring communities. There will be a serious growth in GDP and per capita income, which is again one of the essential goals of economic development,” Krishnan stressed.

The expected rise in the standard of living in Qatar and infrastructural development in areas like education, healthcare, and other public services “would be a direct result of the country’s growing entrepreneurship culture,” Krishnan said.

Source:http://www.gulf-times.com/story/563602/Qatar-startups-manufacturing-sector-gain-more-govt