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Oman Sail Masirah won the Extreme 40 Asia Cup held off the Muscat coast in the first week of February. Response from the Omani media seemed muted, as far as I could tell from sitting at my desk in snowy Leicestershire. But then there was a very low key response all round. Even my post announcing the event in January has come third in the Google results.

Perhaps it's not surprising, since sailing is a more exclusive form of sport. You need to be near the sea and able to afford a boat for one thing.

The Extreme Sailing Series website seems to be the best source of news. You'll see the results table and video there.

On the other hand, the Tour of Oman, a new international cycling event following close after the Tour of Qatar, kicked off in Matrah this week. Photos from Kishorcariappa's blog show a strong field of contenders and suggests that many spectators came out to watch. The first stage began from the Corniche in Matrah in the dark, accompanied by fireworks.

In fact, there were complaints from competitors that it was actually too dark to race and that spectators were not always aware of the speed of travel of the cyclists. Luckily, there were no reports of accidents.

See marvellous photographic coverage at the Cycling Weekly website, and current reports on the racing. Those links may not work in the weeks and months to come as the news is archived.

It's good to see major sporting events coming to Oman, which ought to attract foreign tourists, even though a small minority of the tweets I've seen have been less than enthusiastic about the influx of visitors.

Meanwhile, the sorry saga of Blue City limps on. An article in Abu Dhabi's The National on 18th February has revealed that Axis Capital, an insurance and reinsurance company, is cutting its losses and pulling out.

Axis had been insuring $399m of senior notes which Moody's downgraded last year.

Blue City, or Al Madina al Zarqa, has been a focus of the downturn in the Oman property market.

The article also quoted Suketu Sanghvi, the senior managing director of structuring and investments at Essdar Capital in Dubai, confirming that his company had bought top class bonds in the project at considerable discount last summer.

He blamed the litigation between the two original partners of the project for the loss of confidence

He continues to be hopeful, and expects more positive news in two months after a period of 're-structuring.'

It's a pity that the management don't pursue a policy of transparency, despite possible legal requirements for remaining silent on some aspects of the affair. Transparency is a sign of honesty and trustworthiness. There's no encouragement to invest in a deal when you can't find anything out about it.

Added 24th February 2010: The National has published Blue City takes a hit from Moody's. The $399 million bond tranche has been downgraded to "high credit risk" status.

The CEO of BCC1, Richard Russell, remains unavailable for comment.

Apparently the insurers, Axis Capital, are still in the game, but have increased their loss provisions for the project.

The Red Funnel ferry terminal at East Cowes on the Isle of Wight was the last place that I expected to be able to read about Oman. But I did. What's more, Oman Sail Masirah featured on the very front page of All At Sea, a free waterfront newspaper, as the winner of the Hong Kong leg of the Extreme Sailing Series Asia, with a front page photo of 5th placed The Wave Muscat competing.

Oman Sail Masirah also won the second leg in Singapore, with The Wave Muscat coming third.

And that is how I learnt that the third leg of this series will be held off the coast from The Wave to Al Hail, Muscat, 1st-5th February 2010. Lucky you who will be able to watch. Access is free to all to encourage interest in the sport.

It would be nice to see more made of this fantastic event in the media. Watch promotional videos which feature the two Omani crewmen on board Oman Sail Masirah. Are they being shown on Oman TV?

Oman Sail Masirah won last year's iShares Cup in Europe with Oman Sail Renaissance in third place.

iShares will not be renewing sponsorship this year, but the event will be going ahead with a different sponsor.

French Club Med's first resort in Arabia will be at Salalah, Governorate of Dhofar in southern Oman. The company signed a deal with Muriya Tourism Development company ten days ago.

Club Med specialises in luxurious, self-contained resorts with all manner of sports and activities for adults and families. The company offers luxury accommodation in many exotic locations. If all you want to do is to vegetate in the sun for two weeks, Club Med is hard to beat - I guess. I've never been on one of their holidays myself.

The Club Med philosophy dovetails very neatly with the Ministry of Tourism policy of encouraging 'high-class' tourism in set-apart locations. Salalah has a climate which would appeal much of the year to Europeans. Its summers of cloud bound mist, the Khareef, attracts many Gulf tourists as an escape from oppressive heat. For them, Rotana and Moevenpick will offer five-star accommodation.

Dr Rajha bint Abdulameer bin Ali, Minister of Tourism speaking to the Oman Observer, justified growth in tourism because tourists spend money and stimulate the local economy. Tourism projects also provide construction jobs for labourers - nationality unspecified - and enable them to improve the lifestyle of their families. Supplying these results with local produce would stimulate the growth of SMEs, although I have my doubts about that. I wonder why she had to explain these basics.

But you know, if I was spending all that money to fly to Salalah, I'd want to get out and see a bit more. Possibly the desert, or the 'lost city of Ubar.' At least get up into the misty hills to see rain-soaked vegetation in what you think of as desert, waterfalls and Job's Tomb. September is recommended. The air is clear of dust after the mists have gone and the flowers bloom after the monsoon rains.

Yusuf bin Alawi bin Abdullah, minister responsible for foreign affairs, visited Tehran again earlier this month for trade talks with senior government officials. At a press conference with President Mahmoud Ahmedinejad, he implied that Western-sponsored talks between Israel and the Palestinians "would not have a result," and appeared to agree with the Iranian president that the Arab states needed to promote their own solution to the conflict. Has he conveyed this message to the US Secretary of State?

In another press conference convened with his Iranian counterpart Manouchehr Mottaki, bin Alawi was reported to have said that, "We believe that the Persian Gulf and the Sea of Oman should be free seas for international navigation and no change should take place there and they should not turn these places ruled by parading fleets of warships." He added that Oman does not accept "the presence of foreign military forces in these secure regions [because] such a move is a violation of the international rules and regulations."

Since none of this is reported in the Omani press, the reader must take into account that the Omani foreign minister's remarks are reported by the Iranian media, and may contain an unintended bias.

Four days after bin Alawi's return to Muscat, the Iranian Press Agency announced that a new, government backed trade centre would open in Muscat as home to 60 Iranian companies bidding for work in the Sultanate.

Oman published its annual budget on January 1st. The minister for national economy, Ahmed bin Abdulnabi Macki, said that government spending would increase by 12% compared with 2009 to 7.18 billion rials ($18.7bn) in 2010, compared with projected revenues of 6.424 billion rials, based on an oil price of $50 a barrel. Oil and gas revenues would account for 76% of government income.

The deficit will be covered by withdrawals from the State General Reserve Fund.

Government figures showed that Oman sold its oil at an average price of $51.85 a barrel in January to September last year, whereas its 2009 budget was based on a figure of $45 a barrel of oil.

Since Oman is not a member of OPEC, the country was not compelled to abide by production quotas and increased daily production of oil to 806,000 barrels in the first nine months of 2009, a rise of 7.5% compared to the same period in the previous year.

937 million rials have been allocated for expenditure on projects that will create 4,000 jobs for nationals in the labour market, including water desalination plants, schools, roads and hospitals . At which one's eyes widen. Did the minister mean that Omani nationals would actually be building these projects rather than the Asian labourers who are normally imported to carry out menial work?

"Oman's total debt as of the end of 2009 stood at 722 million Omani riyals ($1.88 billion), with domestic debt accounting for 252 million riyals of the total figure."

Major infrastructure projects will continue. Duqm Port is expected to be ready by 2012.

Macki reiterated yet again that Oman would not be joining the Gulf currency union. Neither had it any intention of changing its currency peg from the US dollar. The Sultanate left the union in 2006.

The 30th summit meeting of the Gulf Cooperation Council (GCC) has just concluded in Kuwait. HH Sayyid Fahd bin Mahmood al Said, Deputy Prime Minister for the Council of Ministers, attended the summit on behalf of HM Sultan Qaboos.

Absence from a summit meeting of this nature tends to send a diplomatic message. 'I have more important things to do,' or 'I'm not happy about the agenda,' or 'Somebody's upset me.' Since Gulf Monetary Union was a major topic for this conference, and Oman is adamant that it will not join, the absence of His Majesty sent a pointedly discreet signal. Kuwait, which hosted the meeting, had positively asserted that both UAE (which quit last year) and Oman, which announced its decision in 2006, would re-join the fold.

I think I'd side with the leader who felt that discussion of the Swiss government's ban on minarets should be assigned to a minor item under Any Other Business. As it was, the Oman Observer reported that the council was 'overwhelmed' by the decision and classified it as 'discrimination against Islam.' The affair evidently stretched mind and comment.

Understandably, the impact of the global recession, especially events in Dubai, was a talking point, as was the armed infiltration of Yemenis across the Saudi border. The delegates gave full support to both Saudi Arabia and the Yemen government on this issue.

Note that the summit was held at exactly the same time as the Copenhagen summit on climate change. National leaders were converging on Copenhagen as the GCC summit was closing.

I had wondered if there would be an official delegation from Oman in Copenhagen, and eventually discovered that His Majesty is being represented by Sayyid Hamoud bin Faisal al Busaidy, Minister of Environment and Climate Affairs, accompanied by Sayyid Badr bin Hamad al Busaidy, Secretary General of the Foreign Ministry, Mohammed bin Sakhr al Amri, Under-Secretary of Transport and Communications Ministry for Civil Aviation and other government officials.

The official list of confirmed delegates lists just one businessman from the UAE and no other Gulf national. Climate change has obviously not been recognised in the Gulf as an opportunity to develop business.

Saudi Arabia and Kuwait have been notable opponents to any climate change agreement, arguing that cuts in energy and thus oil consumption, would cause billions of dollars of losses to the Gulf economies. Mohammed al-Sabban Senior economic adviser, Saudi Arabia, has been earmarked as 'Copenhagen's most likely villain.' Commentators counter-argue that Saudi has great wealth to fall back on while poorer countries in the Group of 77 have slammed Saudi Arabia for undermining key issues in the climate change talks that affect them.

So full marks to Oman's Haidthan (should that be Haitham?) Al-Yakoubi, 23, who is an official observer at the summit, thanks to British Council sponsorship. He does not argue against using oil but wants his government to invest in better technology to reduce emissions. Business opportunity there, surely.

He also wants the government to develop solar power, because he recognises that oil will run out some day. He views the Copenhagen summit as an opportunity to learn how to increase awareness of the issues back home.

GCC leaders were not entirely oblivious to climate change issues. They argued for the peaceful implementation of nuclear energy under IAEA rules. Both UAE and Oman have signed agreements to implement nuclear energy.

Agriculture, livestock and fish resources, global warming and climate change, people with special needs - all have been referred to ministerial talks as a basis for discussion at the 31st GCC summit next year.

Postscript 18th December: Are you fascinated by conspiracy theories? Read this blog at today's (18th Dec) Daily Telegraph, which posits a connection between the Sultanate of Oman, Royal Dutch Shell and the Climate Research Unit (CRU) at the University of East Anglia. Remember? Saudi Arabia claimed that the theory of climate change had been brought into disrepute by the allegation of 'fixed' data at the CRU.

Indeed, the Sultanate of Oman is named as a sponsor of the CRU. I'm still trying to make sense of it all.

I didn't know about Professor J B Kelly until I read his obituary published in today's Daily Telegraph.

He had a long association with the Gulf and particularly with Oman. I can only quote:

Kelly made his first trip to the Gulf in 1957.

He visited Iraq in the dying days of the Hashemite regime and then flew on to the Trucial Coast - known in the 19th century as the Pirate Coast, and now forming the United Arab Emirates. The only Europeans in Abu Dhabi at that time were either oil men, diplomats or soldiers.

The British political officer introduced him to Sheikh Shakhbut before taking him to see his brother, Sheikh Zayid. Kelly was to form a firm friendship with both men, which was to survive the political turmoil in Abu Dhabi in the following two decades.

He paid a particularly instructive visit to Buraimi, Oman, from where British-officered Trucial Scouts had ejected an American-backed Saudi force (engaged on an oil-grabbing mission) in 1955. He and the political officer, Martin Buckmaster, soon picked up signs that the Saudis were retaliating by stirring up the tribes of inner Oman with arms and money. Kelly passed this information on to the British political resident in Bahrain, Sir Bernard Burrows, who discounted it, coming as it did from a Gulf novice.

Burrows returned on leave to London, only to be called back to the Gulf in a hurry in July 1957 when the Imamate rebellion broke out in Oman. Kelly's first publication, written for Chatham House, was a paper on the revolt.

Subsequently, the British had to assist Sultan Said bin Taimur to put down the insurrection centred on Al Jabal Al Akhdar.

in the early 1980s, Kelly's advice on the region was sought by administration officials, senators, congressmen, journalists and think-tanks. He was directly involved in lobbying against the sale of AWACs early-warning aircraft to Saudi Arabia, arguing that it would further destabilise the region. But as Saudi influence grew in Washington with Reagan's forging of an informal alliance with the kingdom, Kelly's influence inevitably declined. His prescient warnings that Saudi money was being used to establish an international network of Muslim fundamentalists were thus largely ignored.

Subsequently, he advised the government of Oman on its disputed frontiers with Saudi Arabia and South Yemen, paying trips to inner Oman, Dhofar and the Musandam Peninsula.

I would recommend reading this article as a small insight into the history of the Sultanate.

Note that Sir Ivor Lucas, ambassador to Oman between 1979-81 commented that, as a junior member of staff to Sir Bernard Burrows, he did not recall that Professor Kelly's warning to the political resident about Saudi machinations was ever 'discounted.' For further reading, see Oman's Insurgencies: the Sultanate's Struggle for Supremacy, by J E Petersen, published 2007 by SAQI. Dr Petersen acted as official historian of the Sultan's Armed Forces while working in the Office of the Deputy Prime Minister for Security and Defence.

Amongst Western media sources, apparently only the Wall Street Journal announced the visit of HM Sultan Qaboos bin Said al-Said and his high level delegation to Iran at the start of August, and then only in passing.

I listened closely to BBC News on 5th August 2009, the day that Mahmoud Ahmedinejad was installed as president of Iran, while opposition protests continued in the streets, but no mention was made of the Omani Sultan's visit.

The visit had been postponed from 28th June, when rioting and unrest, and objections of corruption from other participants in Iran's elections gave the Omani side second thoughts. Not because Oman had objections to the conduct of elections, but because Mr Ahmedinejad had not been confirmed in his post.

It would never do from the point of protocol for the Omani Head of State to meet someone who might conceivably be an imposter.

Asharq al-Awsat emphasised that all the Gulf states would observe the appropriate protocols, and send a congratulatory telegram to the newly installed Iranian president.

I have read that the lower Gulf states have rather more respect for Iran than they do for Saudi Arabia. But some might say that these states would be uncomfortable with Iran's sheer military size and postulated development of nuclear weapons as opposed to the peaceful development of nuclear power.

On which the reader should note that both Oman and UAE have also signed agreements with foreign powers to develop nuclear energy. Oman signed an agreement with Russia's Rosatom in June whereas the UAE signed deals with France in 2008 and with the USA early this year.

Oman has no particular disagreements with Iran. An Iranian official has been quoted as saying that "There is no outstanding problem on ideological level or in territorial issues between the two countries. That's why they [Iranian leaders] think partnership with Oman is more promising in the long run."

Nonetheless, Oman's minister responsible for foreign affairs, Yusuf bin Alawi bin Abdullah, had been making shuttlecock trips between Muscat and Tehran, presumably negotiating for the most suitable time for His Majesty to make his delayed visit.

I would not call the timing of the visit a triumph of diplomacy. And one is left wondering whether Mr Abdullah had other motives for promoting it. Is it noteworthy that a month later, as chairman of the GCC Council's foreign ministers' meeting in Riyadh, Mr Abdullah placed emphasis on His Majesty's successful visit to Iran in the context of bringing security to the region, called for the right of all countries to develop nuclear power for peaceful purposes and a rapprochement between Iran and the West on this issue?

Because you could say that there was a hint of desperation, reinforced by headlines from Tehran, such as, "Oman eyes importing 2bcf of gas from Iran."

'"The Omani delegation declared their dire need to import 2 billion cubic feet of Iranian gas," Mehr quotes an Iranian gas official saying'

Significant agreements were signed. The Hormuz Petrochemicals company was established as an $800m joint venture between Oman Oil Company (OOC) and NBC international company to develop a urea production plant in southern Iran. "Oman oil and Hirbodan EPC also signed a MoU to build a power generation plant at Queshm Free Zone."

Yusuf bin Alawi bin Abdullah for Oman and Iranian Foreign Minister Manouchehr Mottaki signed security agreements on exchanging information, combating infiltration, smuggling and crime as well as an MoU to set up a centre for teaching Persian in Muscat, establishing other cultural activities and exchanged documents on the avoidance of double taxation on taxes resulting from investments by both governments.

The big deal didn't happen. The Omani delegation came home empty handed over the gas issue. Oman had signed an agreement with Iran only last year to develop Iran's Kish gas field and to build a pipeline to a LNG plant at Sohar, at a projected cost of $12b. The understanding was that Oman would need to form a partnership with an unspecified Asian country that had the technical expertise that OOC lacked.

The presence of the ministers of national economy, commerce and industry and oil and gas in the delegation indicated that Oman fully expected progress towards closure on this proposal. Expansion of industrial ventures in Oman will be severely hindered if more energy supplies are not forthcoming, including four enhanced oil recovery projects.

It wasn't the unit price that was under discussion apparently, but Iran's uncertainty about how much gas the Kish field actually contains. It seems that it may not be as bountiful as at first thought.

Iran has suggested to Oman that it could enter a gas swap arrangement. If Oman can come to agreement with a gas-rich Central Asian state, Iran could import gas from the north, and then pipe gas to Oman from its southern fields. This would be a new departure for the Omanis.

I wonder what His Majesty thought of it all. Was he fully aware that he would not come away with the assurance of energy supplies vitally needed by his country?

And would it rub it in that UAE's Mubadala Petroleum Services Company has put a bid in to import gas from Iran's Salman field, now that the National Iranian Oil Company' deal with Crescent National Gas Corporation has been unable to resolve unit prices? Mubadala is a key shareholder in Dolphin Energy, a company that exports gas from Qatar into UAE.

Dubai's Essdar Capital Group announced on 22nd July that it was bidding for the "outstanding Class A (A1 and A3) Floating Rate Senior Secured Unrestricted Notes (the “Notes”) issued by Blue City Investments 1 Limited (“Blue City”) with outstanding principal amount of US$ 661.5 million."

If successful, the group might subsequently hold an aggregate of more than 75% of the notes. Essdar acknowledges that it already holds an undisclosed number of notes. It is prepared to pay between 50% to 71% of the original price of the bonds, which mature in 2013 and 2016.

On 28th July, the company extended the time frame for the offer to 5pm London time on 5th August. It will announce on 6th August whether the purchase will proceed. Payment is scheduled to follow on 11th August if the deal goes through.

The offer is not open to citizens of USA, UK, Italy, France or Belgium and is problematic in Luxembourg.

The senior managing director at the company described the potential investment as a high risk, high return strategy, but that the long-term outlook for real estate in the Gulf and particularly for this large project, was good.

The Essdar Group was established as an investment vehicle in 2007. Its component companies, Essdar Capital Ltd and Essdar Capital Managers Ltd are regulated by the Dubai Financial Services Authority.

Essdar's major shareholders are Capital Investment of Abu Dhabi, Dubai Holding, Royal Group, a conglomerate of 60 large to medium sized UAE companies headquartered in Abu Dhabi and Kuwait-based Al Mazaya Holding which is already operating three projects in Oman.

Update on 13th September 2009:

A press release on Essdar Capital's website announces that "all Notes tendered prior to the Expiration Time (as defined in the Invitation for Offers) have been accepted without pro-ration."

Weighted average offer price
Class A1 Floating Rate Senior Secured Unrestricted Notes due 2013 - $570.00 per $1000 principal amount
Class A3 Floating Rate Senior Secured Unrestricted Notes due 2016 - $543.67 per $1000 principal amount

No further news at this stage.

With apologies for lack of comment as I am literally waiting to go into hospital. Although I don't think comment is particularly required.

Essentially, with fall in real estate investment in tourist resorts in Oman over last 18 months, and negligible sales at Blue City this year, there is a danger that the loan will be declared in default unless the loan sales test is restructured or income increases substantially. The date to watch is 7th November 2009.

Read the press release at Nasdaq and the article in Maktoob Business.

A prestigious sailing competition is in process in Europe. The iShares Cup is being fought over by ten sailing teams from around the world. Six events, each held over three days, are taking place for the Extreme 40, a scaled-up version of the Olympic class catamaran.

Oman is represented by two boats, the Renaissance and the Masirah, both falling within the ambit of 'Oman Sail', an ambitious programme to rekindle Oman's maritime heritage.

Mubarak al Battashi and Khamis al Anbouri from the Oman Sail Race Academy are rotating between both boats over the summer to obtain crewing experience. Any Omani is welcome to join the academy, providing they have commitment, loyalty and willingness to learn. There's also a hint that selection and training is "harder than special forces selection."

Renaissance is sponsored by Renaissance Group and Suhail Bahwan, and Masirah is backed by the Omani government.

Having already battled it out at Venice, the teams are currently sailing out of Hyeres in France. Masirah came first in today's races and is currently lying fourth on the team leaderboard. Renaissance lies third overall.

After Hyeres, four events are to come, including Cowes week at the beginning of August on the UK's Isle of Wight.

How is my family connected? My daughter, who lives and works on the Isle of Wight, has been responsible for supplying all the teams with disposable catering supplies. All the supplies are biodegradable, so that they can be tossed overboard into the sea after use with minimal impact, hopefully, on the environment.

Sailing is, on the whole, a 'high net worth' occupation, particularly when you're plying boats such as the Extreme 40. Bahrain has a Formula 1 Grand Prix, why shouldn't Oman aim at a superlative sailing competition?

That would presumably attract a lot of wealthy individuals to the country. It'll be interesting to see how Oman Sail develops.

Bovis Lend Lease, a UK based construction company with a global reach, is suing Blue City management (presumably BCC1), for unpaid bills accrued for its tenure as project manager of the first phase of the Blue City development between 2005 and 2008.

The company is claiming £920,000 ($1.5million) of damages and interest in addition to the fees owed. The writ against the developer alleges that Dr Fari Akhlaghi, CEO of the company at the time, had assured Bovis that it “should have no worries or doubts” about receiving payment. The fact that the project was government-backed added credibility to BCC1.

Bovis is just one of numerous British companies that are owed a lot of money in the Gulf. The estimated total of fees owing is at least £400 million. A spokesman for a group representing British consultants overseas has said that there has always been a problem of delayed payment in the Gulf region, but the money would usually come in eventually. Now it is not.

Bovis Lend Lease has now ceased work on the Blue City project.

Update at 24th June/3rd July 2009

Richard Russell, CEO of BCC1, has hit back at reports about Bovis Lend Lease's writ against the company published in Building Magazine last week. He said that Bovis had already received $1million before beginning work and would receive full payment for services rendered in due course. Mr Russell was at pains to point out that Bovis Lend Lease was never Project Manager of the Blue City project although it had provided project management services, ie, personnel. That seems to me like splitting hairs, but I imagine that there would be a legal definition of the distinction.

He was 'afraid that 'the original report was “trying to tie us to the situation in the Emirates, which is completely unfounded”, in reference to a spate of cases of unpaid services in the UAE.'

Mr Russell also confirmed that the case would be heard in a British court.