Oman's $100 million joint investment with Vietnam
Ahmed bin Abdulnabi al-Macki's trip to the Far East appears to have been fruitful. Macki is Oman's Minister of National Economy. Aside from his launching of the giant crude oil tanker Mirbat in South Korea, he also wrapped up a deal in Vietnam on the 18th April.
The report of the meetings in the Times of Oman was couched strangely in diplomatic rather than commercial language. Macki and Vietnamese Finance Minister Vu Van Ninh were reported to have held talks, in which, "they discussed a number of issues that positively affect and further promote the joint cooperation in the field of commerce and economy between the two countries."
A year ago, Oman Oil Company (OOC) and PetroVietnam signed a memorandum of understanding in Muscat for joint cooperation in production and refining operations, exchange of expertise and joint investment, when Maqbool bin Ali Sultan, Oman’s minister of commerce and industry and OOC chairman, said that the MoU with PetroVietnam was part of OOC’s effort to widen its investments. Vietnam's production of crude oil is estimated at 350,000 barrels per day. The country has gas reserves of about 70 trillion cubic feet.
Vietnam's Deputy Prime Minister Nguyen Sinh Hung travelled to Muscat in December 2007. Macki announced then that in addition to the PetroVietnam agreement, Oman Oil, Oman Shipping and Omani Fund for Investment would start joint ventures in Vietnam.
In talks with Sayyid Fahd bin Mahmoud Al Said, Deputy Prime Minister of the Council of Ministers, "Hung also called for Oman to open its doors to more Vietnamese migrant workers, saying the country's well trained and experienced computer engineers, health workers and construction workers could help meet the sultanate's needs for skilled labour. This could be beneficial for the sultanate, which has been experiencing a shortage of manpower as well-trained employees leaving the country for better paying jobs elsewhere. [ ] A memorandum of understanding was signed [to this effect] on December 9 between Oman's manpower ministry and the Vietnamese social affairs ministry setting out the initial steps to allow for the exchange of labour between the two countries." from Oxford Business Group, 11th December 2007.
In 2006, Oman’s imports from Vietnam amounted to $ 5 million, while Oman’s exports to Vietnam stood at $ 2 million.
The signing of the trade deal last week was presumably an outcome of last year's consultations in Hanoi and Muscat.
Macki was reported to have said that "Oman wants to cooperate with Vietnam in finance-banking, oil and gas, coal, real estate and resort building. Oman is also willing to train and receive Vietnamese guest workers."
The Vietnamese News Media have been more forthcoming. Unspecified Omani companies signed an agreement to form a joint-venture company backed by $100 million, with Oman contributing 75% of the funds and the balance coming from Vietnam's State Capital Investment Corporation. Oman's State General Reserve, Oman's sovereign wealth fund, was named as an investor in Vinaconex Tourist Development (Vietnam Construction & Import - Export Corp), possibly through the Oman Investment Fund.
The World Travel and Tourism Council (WTTC) predicts that Vietnam has the world's fourth fastest growing tourist demand over the next ten years, certainly beating Oman.
Remarks by Philip Atkinson, Regional Director of Dubai-based Limitless, the international real estate arm of Dubai World, indicate that a lot of work is needed first to transform Vietnam's transport infrastructure before investing heavily in tourist development. Even so, the country has a policy similar to Oman in preferring to attract high-income tourists. As in Muscat, rooms in Ho Chi Minh City can come at a premium. Large stretches of pristine coastline could be transformed, not altogether for the better in my view, into prime waterfront real estate. See a report on Vietnam in this week's Economist.
The two countries also signed an agreement on double taxation avoidance and income tax evasion prevention.
The agreement provides for 1,000 Vietnamese labourers to come and train in Oman, presumably in the gas and oil sector. Furthermore, the report said that Oman also wanted to import 40,000-50,000 tonnes of Vietnamese rice.
Oman would be favoured if it received rice imports. The price of rice has risen 42% in the first quarter of 2008 as well as doubling last year. Vietnam is one of those countries that have imposed export restrictions on the grain thus contributing to the rocketing price of rice.
Thus in one stroke, the minister for national economy has alleviated labour supply and food shortage problems in Oman. How effectively remains to be seen.
NB. My apologies to anyone who read this item thinking that it really was a $1 billion deal. It's just that earlier reports had speculated that the amount COULD be $1 billion. Check the Vietnamese News Agency report for confirmation.
The report of the meetings in the Times of Oman was couched strangely in diplomatic rather than commercial language. Macki and Vietnamese Finance Minister Vu Van Ninh were reported to have held talks, in which, "they discussed a number of issues that positively affect and further promote the joint cooperation in the field of commerce and economy between the two countries."
A year ago, Oman Oil Company (OOC) and PetroVietnam signed a memorandum of understanding in Muscat for joint cooperation in production and refining operations, exchange of expertise and joint investment, when Maqbool bin Ali Sultan, Oman’s minister of commerce and industry and OOC chairman, said that the MoU with PetroVietnam was part of OOC’s effort to widen its investments. Vietnam's production of crude oil is estimated at 350,000 barrels per day. The country has gas reserves of about 70 trillion cubic feet.
Vietnam's Deputy Prime Minister Nguyen Sinh Hung travelled to Muscat in December 2007. Macki announced then that in addition to the PetroVietnam agreement, Oman Oil, Oman Shipping and Omani Fund for Investment would start joint ventures in Vietnam.
In talks with Sayyid Fahd bin Mahmoud Al Said, Deputy Prime Minister of the Council of Ministers, "Hung also called for Oman to open its doors to more Vietnamese migrant workers, saying the country's well trained and experienced computer engineers, health workers and construction workers could help meet the sultanate's needs for skilled labour. This could be beneficial for the sultanate, which has been experiencing a shortage of manpower as well-trained employees leaving the country for better paying jobs elsewhere. [ ] A memorandum of understanding was signed [to this effect] on December 9 between Oman's manpower ministry and the Vietnamese social affairs ministry setting out the initial steps to allow for the exchange of labour between the two countries." from Oxford Business Group, 11th December 2007.
In 2006, Oman’s imports from Vietnam amounted to $ 5 million, while Oman’s exports to Vietnam stood at $ 2 million.
The signing of the trade deal last week was presumably an outcome of last year's consultations in Hanoi and Muscat.
Macki was reported to have said that "Oman wants to cooperate with Vietnam in finance-banking, oil and gas, coal, real estate and resort building. Oman is also willing to train and receive Vietnamese guest workers."
The Vietnamese News Media have been more forthcoming. Unspecified Omani companies signed an agreement to form a joint-venture company backed by $100 million, with Oman contributing 75% of the funds and the balance coming from Vietnam's State Capital Investment Corporation. Oman's State General Reserve, Oman's sovereign wealth fund, was named as an investor in Vinaconex Tourist Development (Vietnam Construction & Import - Export Corp), possibly through the Oman Investment Fund.
The World Travel and Tourism Council (WTTC) predicts that Vietnam has the world's fourth fastest growing tourist demand over the next ten years, certainly beating Oman.
Remarks by Philip Atkinson, Regional Director of Dubai-based Limitless, the international real estate arm of Dubai World, indicate that a lot of work is needed first to transform Vietnam's transport infrastructure before investing heavily in tourist development. Even so, the country has a policy similar to Oman in preferring to attract high-income tourists. As in Muscat, rooms in Ho Chi Minh City can come at a premium. Large stretches of pristine coastline could be transformed, not altogether for the better in my view, into prime waterfront real estate. See a report on Vietnam in this week's Economist.
The two countries also signed an agreement on double taxation avoidance and income tax evasion prevention.
The agreement provides for 1,000 Vietnamese labourers to come and train in Oman, presumably in the gas and oil sector. Furthermore, the report said that Oman also wanted to import 40,000-50,000 tonnes of Vietnamese rice.
Oman would be favoured if it received rice imports. The price of rice has risen 42% in the first quarter of 2008 as well as doubling last year. Vietnam is one of those countries that have imposed export restrictions on the grain thus contributing to the rocketing price of rice.
Thus in one stroke, the minister for national economy has alleviated labour supply and food shortage problems in Oman. How effectively remains to be seen.
NB. My apologies to anyone who read this item thinking that it really was a $1 billion deal. It's just that earlier reports had speculated that the amount COULD be $1 billion. Check the Vietnamese News Agency report for confirmation.
Comments
No comments yet