Essar Investments Ltd is in turn owned by Essdar Capital in partnership with Essdar Capital Managers Ltd. The group is based in Dubai where it is regulated by the Dubai Financial Services Authority, but ultimate ownership rests in the hands of members of the ruling Abu Dhabi family.
So what will happen to the dream of Al Madina Al Zarqa? Early intimations suggest that revised ownership might focus on developing tourism, since many of the 'planned hotels, commercial and associated facilities' are on track, and 'better fit demand.' Mr Sanghvi, senior managing director of structuring and investment at Essdar at the time of the deal, is reported to have remarked that the occupancy rates of hotels in Muscat were very high and tourism prospects healthy.
However, a major part of the security on the bond lies in the 25 sq kilometres of land that was gifted by royal order to the original Blue City project back in 2005-6.
Thus Essdar has also had to await the judgement of Oman's Supreme Court on the ownership dispute between AAJ Holdings of Bahrain and Cyclone LLC, the Omani partner, 50% owned by Sayyid Haitham bin Tariq al Said, the minister of culture and heritage and a member of Oman's royal family. See the many earlier postings on this blog.
Earlier this month, Bin Muhanna Holding Group of Qatar and AAJ Holdings Co. of Bahrain said that they had lost the ruling over ownership of the Blue City.
How does Bin Muhanna Holding Group come into the picture? The chairman of the company is Dr Najeeb bin Mohammed Al Noaimi, formerly minister of justice in Qatar, and a defence lawyer for Saddam Hussein. His company's partnership with AAJ Holdings, owned by Ahmed Abu Baker Janahi, was announced in April this year. Indeed, it's been suggested that the interest of Qatari investors added incentive to Essdar's completion of the bond purchase.
Mr Al-Noaimi for his part did not rule out "lawsuits at the London Court of International Arbitration and the ICC International Court of Arbitration in New York," to contest the Omani court's decision, echoing some of Mr Janahi's earlier pronouncements.
What will happen to Cyclone's interest?
It's one thing to own the project, quite another to develop it to make it work. Apparently there had been more interest from US and European investors than from other Gulf partners while BCC1 was running the show. Yet 'as of November last year, only $75m worth of sales had been made, compared with a forecast of $860m.' Legal niceties remain to be resolved and new investment partners found. That's not so easy in a depressed market.
Essdar itself has not committed to injecting further cash into the development.
AAJ Holdings brought the Qatari company in because it needed further financing, not only for Blue City but also for its stalled $750 million Marina West development in Bahrain. Work stopped abruptly on Marina West in March, leaving dozens of residents who had bought off-plan, wondering when they might be able to move into their homes.
Mr Janahi used a press release to announce that his company was determined to bring the project to completion, was working with the developers, Bahrain's major construction company Al Hamad, and had introduced new partners (Bin Muhanna) whose input would give fresh impetus.
Everybody seems reluctant to comment.
My first thought was that the airlift operation to evacuate the island in the path of the cyclone had not worked fast enough. I know from having travelled there by boat, that it's not possible to rely on the ferry services because they need to run at high tide. Treacherous currents operate in the straits, and maybe some inhabitants were trapped on the island during the cyclone. Subsequent reports indicated a general dissatisfaction that the island doesn't get enough tourists, that prices are too high because transport costs are high, ferry services are erratic and that there's no work on the island itself. All of which I have to concede are true.
The cost of the bridge is projected to be US$1.5bn. That's US$125,000 per head of population of 12,000. Has the bridge been in planning for some time, or have the feasibility, engineering and technical studies yet to be done?
Starry-eyed dreams of prosperity need to be counterbalanced by recognition that a bridge alone will not achieve results. More tourists mean that there would need to be more facilities for them. Coaches of tourists still require to be fed and watered in places which have ambience. They are not likely just to be content with visiting beaches and then returning to the mainland.
There will have to be more hotels. What kind of jobs are anticipated to be created? Will the young people of the island be willing to stay there and work in tourist hospitality? But of course, I forget, these will be high net-worth tourists, as per Oman's tourism policy. In coaches?
Beaches on the eastern side of Masirah facing the Indian Ocean are breeding grounds for rare loggerhead and greenback turtles. Any tourism drive to reveal the turtles should at least strive to be eco-friendly. I have seen tourists arrive late in the evening at Ras al Hadd trouping down to the beach to watch the nesting turtles, shining flashlights and using flash photography, before trekking back to wherever they had come from. None of this is conducive to preserving turtle nesting sanctuaries.
Think about it. It takes quite a time for a female turtle to burrow herself into a fairly deep hole in the sand, and then to lay her many eggs and cover them up. By the time she makes it back to the sea, she must be exhausted. If you were a turtle, would you want to be overlooked while laying eggs, and have flashlights shone in your eyes and be banged on the top of your shell, at a time when you are most vulnerable?
How long would the nesting sites last in the face of inconsiderate tourists? And once the nesting places go, what else is there on the island to attract tourists unless you're a bird watcher or geo-tourist? There's always water sports I suppose, providing the seas don't get too rough.
In short, is there a plan for development of Masirah as a whole, other than for building a bridge to the island? No wonder the official from the Ministry of Finance declined to be identified. As one of the longest sea bridges in the world, rivalling the Qatar-Bahrain causeway, it might be a tourist attraction in its own right.
I remember camping on the beach at Masirah with my husband and son just two nights before the millennium. We were quite alone save for a rare vehicle on the coast road. It wasn't the time of year for nesting turtles to visit anyway. I think one of the treasures of my life must be the solitude and space that we experienced there. I wouldn't trade that for the world to share with a busload of tourists.
An afterthought to my previous post. One report stated that houses in the village of Ghaf were flooded when Cyclone Phet passed through, although not as badly as during Cyclone Gonu. Ghaf lies downstream of the new dam on Wadi Dayqah. Did the dam overflow during the cyclone? How are the water levels in the dam holding up, and how much alluvium was brought down into the dam during that period of discharge? Just a thought.
I admit to not having had my eye on the ball, being more concerned with investing in property in Morocco at the time. There are interesting comparisons between tourism development in Oman and Morocco, but examination of that will have to wait until a later date.
While newsbriefsoman was absent, Oman Observer updated its web presence and joined Web 2.0. It now publishes via a content management system which enables it to archive stories with unique urls. You can download story feeds in an RSS reader. The format appears tidy and structured.
Also see daily reminders of stories from both Oman Observer and Times of Oman at newsBriefsOman on WebPartner.
The other major event was Cyclone Phet. Phet hit the eastern seaboard of Oman almost exactly three years to the day since Cyclone Gonu struck the country. Gonu was the strongest known tropical cyclone on record in the Arabian Sea. It headed directly northwestwards past Muscat and eventually crossed Iran. See storm track on wikipedia.
Cyclone Phet threatened to be almost as powerful, but changed track and veered northeastwards towards Pakistan after reaching the eastern Omani coast. It didn't hit Muscat directly.
The authorities were better prepared than they had been and the Royal Oman Police evacuated the island of Masirah which lay in the storm's path.
Oil exports were halted at Mina Fahal, the terminal near Muscat, and gas production at Oman LNG closed down for a couple of days. No damage was reported, publicly, at these installations.
The DG for the Interior region in the Ministry of Agriculture asserted that damage to Oman's date crop in the interior was not as bad as was the case in 2007.
Local media seemed to lose interest quickly, possibly because Muscat, the biggest centre of population, did not suffer anywhere like as much damage as it had during Cyclone Gonu. Muscat may have been sheltered to some extent by the mountains of Al Hajar behind it. Towns and villages on the southern side, such as Amerat and Quriyat, were very badly affected. Quriyat had been laid waste only three years before by Cyclone Gonu.
Electricity and water supplies were restored swiftly to the most populated areas of Muscat and Amerat, but not Quriyat.
Although Phet was downgraded to Tropical Storm status, it devastated eastern Sharqiyah while it still had cyclonic force. See Phet's storm track on wikipedia.
Over 20 people were reported as having died, one of whom was a member of the Civil Defence Force of the Royal Oman Police (ROP) who ventured into a wadi to try and save a family trapped in the floodwaters.
Oman's most notable charity, Dar al Atta'a or The House of Giving, moved into action swiftly, sending supplies and volunteers into the area south of Muscat. A spokesperson commented that it was imperative that a disaster management body be formed to cope with the impact of cyclones since the country's coastal regions could be regularly affected.
This appears to have happened by direction of HM Sultan Qaboos bin Said al-Said, who personally ordered the creation of a National Crisis Management Committee following Phet, and the restructuring of the national plan for crisis management.
Very little news of the impact of the devastation emerged in the official English-language media. A report in the Times of Oman related just one case study from a village in Amerat where the interviewee had lost his house and all his possessions. All official help he had received in three weeks were two bags of rice and water from the Armed Forces.
Abu Dhabi's The National, published businessmen's response to their losses on 7th June.
Here and there on the web are intimations of personal tragedies. One tweeter said that her family's farm had been destroyed. Another tweeter posted a photo of supply-laden trucks funded by BankMuscat bound for Quriyat.
Mr Sythe, on Muscat Mutterings, showed photos of houses levelled by the storm at Yiti, a village just around the corner from Muscat. The 'road,' had virtually disappeared.
A YouTube channel displays videos of the flooding in Jaalan Bani Bu Ali, Al Kamil, Al Wafi in the eastern part of Al Sharqiyah region, rather further away from the capital. The storm closed down 680 units in the Jaalan Bani Bu Ali industrial area.
Reports reaching me via personal messages reveal that it took the government a week to supply drinking water to the area, and that camels, goats and date palm plantation had been wiped out or flattened. It's estimated that it will take at least six months to return to normal.
Total damage caused by Phet in Oman has been estimated as ranging between US$780m and US$900. No official statement of the cost of damage seems to have been quoted
Anticipated insurance payouts on damage caused by the cyclone have been estimated at US$200 million.
Meanwhile, Her Highness Sayyida Rawan bint Ahmed al Said has been appointed Deputy Chairperson of the Board of Directors of National Bank of Oman (NBO), a post that she appears to have re-assumed after originally being appointed as the SGRF representative in April 2005. The role complements her portfolio of financial appointments. Ms Al-Said is named as a senior manager of Oman's 'Bulgarian Acquisition,' which has 'expressed interest in investing in an €4bn nuclear power plant in Bulgaria and a €700m trans-Balkan oil pipeline from Bulgaria’s Burgas to the Greek port of Alexandroupolis.'
Apparently, the board of Al Sawadi Investment and Tourism Company (ASIT) has called a meeting for investors to vote on “dissolution of the company and filing subsidiaries.” The article says that the meeting has been postponed until Monday, pending last-minute proposals on restructuring from some Class A bondholders.
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.
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.
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.
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.
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.
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.
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.Subsequently, the British had to assist Sultan Said bin Taimur to put down the insurrection centred on Al Jabal Al Akhdar.
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.
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.I would recommend reading this article as a small insight into the history of the Sultanate.
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.
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.
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.