Newsbriefsoman http://www.newsbriefsoman.info/ newsBriefsOman - news and comment about Oman en-us Nucleus CMS v3.32 © Weblog http://backend.userland.com/rss http://www.newsbriefsoman.info//nucleus/nucleus2.gif Newsbriefsoman http://www.newsbriefsoman.info/ Serco exits Oman http://www.newsbriefsoman.info/index.php?itemid=437 not intending to proceed with construction of the Joint Technical College, Oman, virtually four years to the day after the company had been told that it was the preferred bidder. A contract had been expected within three to four months of the 2004 announcement.

Serco has a prestigious international reputation and has built up its business thanks to UK government policies of privatisation and outsourcing. The company has been described as the most admired service company in Britain.

Originally created as a UK subsidiary of Radio Corporation of America in support of the cinema industry, RCA Services Ltd changed its name to Serco in 1987. The company has been prominent in defence services in the UK for over 40 years. Just under half of its business is in overseas projects. The Oman Military Training College would have been a jewel in its crown. Worth 1.4 billion US dollars, the 50/50 Serco-Bahwan partnership would have been a 30 year private finance initiative to design, build and operate the JTC.

Serco apparently had ample background and experience to undertake the project since it manages facilities at the Defence College of Management and Technology (DCMT) at MoD Shrivenham in UK. The lead academic partner at DCMT is Cranfield University which would also have been a delivery partner in JTC Oman, along with TAFE Western Australia (TAFEWA) & Edexcel International (UK). Oh yes, there is a legacy website about Oman's military technological college built in more optimistic times.

The company had been active in Oman in various spheres, sponsoring the BBC Young Musicians of the Year concert in 2006 and participating in the e-Games conference also in 2006. Professor Andrew Self OBE, who described the Merlin flight simulator, was apparently drawing up military and civilian vocational career programmes, from national diplomas to masters degrees, for the new college.

Read a summary of the proposed education and training programme anticipated by Education and Training International based at the University of Western Australia You can still see details of the proposed construction of the college.

So what happened? Why was the military and technical training college apparently abandoned? I hardly think it was simply cost, since Oman is not exactly short of funds at the moment.

The language of instruction would have been English. Would that have posed a problem when recruits are native Arabic speakers? I think it's easy to underestimate just how difficult it can be to raise language skills to an appropriate level.

Was there someone in Oman's Ministry of Defence or at other levels of government who felt that Serco's announcement in 2004 had pre-judged the final outcome?

Was it a veiled warning to the UK defence establishment that Oman did not depend on UK based support, since Serco also offers services to Britain's armed services? In 2007 Gulf News reported that the head of the British government's Defence Export Services Organisation was in positive mood about the outcome of talks with the Omani authorities. The delay in signing a contract was typical, apparently, of delays in UK negotiations of privately funded military service provision in general. Perhaps the Omanis got fed up with the protracted negotiations. Perhaps Serco had set the price too high?

You could even ask to what extent the British defence industry is intertwined with the company.

Has another overseas institution or nation offered alternative training? Is a regional GCC military college in the offing?

All fanciful conjectures to fuel any number of conspiracy theories.

Still, Serco doesn't depend on the Oman contract. It's just won the option to operate Dubai's new Metro system for ten years, probably based on its experience as franchise operator of London's Docklands Light Railway. Its partners in the bid might feel injured about what has happened though.]]> Business and industry Sue Hutton http://www.newsbriefsoman.info/index.php?itemid=437 Sun, 11 May 2008 17:59:17 +0100 Oman's $100 million joint investment with Vietnam http://www.newsbriefsoman.info/index.php?itemid=434 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.
]]> Economy and finance Sue Hutton http://www.newsbriefsoman.info/index.php?itemid=434 Sat, 26 Apr 2008 21:11:41 +0100 No light yet at the end of the tunnel - inflation in Oman http://www.newsbriefsoman.info/index.php?itemid=432
The forum gave journalists the opportunity to question senior government and banking figures on the sidelines of the presentations.

Reuters, reported in the Khaleej Times, quoted the governor of the Central Bank of Oman, Hamood Sangour al-Zadjali as saying “Oman needs to slow economic expansion, on money we spend on big projects.”

This is easier said than done. Higher oil prices have lubricated the Sultanate's money supply. The projects to which Mr Al Zadjali was presumably alluding, have been underway for some years now. Since the CBO has been obliged to follow American monetary policy, it can't even raise interest rates to deter investment and spending.

The only anti-inflation measure that the CBO has been able to adopt has been to increase bank reserve requirements to five percent, thereby cutting the amount of money available for loans.

Numerous luxury real estate developments are in the pipeline. I don't read about developers building modest homes for people who haven't got the funds to snap up prime waterfront duplexes.

Still, in order to promote the Sultanate's avowed upmarket tourism policy, the country needs to build more luxury accommodation and hotel rooms, the price of cement and steel notwithstanding.

Mr al-Zadjali's other remark, that 'For private people like you and I, we need to reduce our personal spending and save more money, [so that] we can reduce consumption demand and reduce inflation. There is no other way.' was vaguely reminiscent of Queen Marie-Antoinette's response to being told that the people could not buy bread. 'Let them eat cake,' she replied.

Even when I was waiting in bank queues in Muscat eight years or so ago, friendly people told me of how they were in hock to the banks at high interest rates. Everybody seemed to be in debt.

His Majesty's generous gesture of a 43% pay rise to government employees in February, was really a gesture long overdue. It wasn't a universal pay hike. Senior civil servants at higher wage bands got just five percent. Salary scales had not altered in years. It would be more appropriate in future to make annual reviews and to raise pay scales accordingly.

On top of this, expatriates grumble about the diminishing value of their wages, since the Omani Riyal is linked to the US dollar. Where 70% of the national population is in government employ, there is a significant structural imbalance in the labour market.

I rather think that the consequences of aspiring to higher living standards while paying Asian labour rates, is catching up with the Gulf countries as a whole.

National Economy Minister Ahmad bin Abdul-Nabi Macki's statement that “There is no quick fix. [ ] Inflation will take its natural course in 2008," concurs with The Economist's view that the Gulf States are prepared to sit out the blip, in their estimate that the dollar will revive. After all, they have been down this road before with economic cycles of boom and retrenchments being caused by fluctuations in the price of oil. Except that this time, the price of oil shows no sign of stabilising at all soon.

And that was all Macki had to say on the matter, apparently, other than remarking that 'We took measures of reducing imports and we also we requested wholesalers to reduce prices.'

Government measures to control food and rent prices are well-intentioned but actually interfere with market processes. Where demand is high and supply is scarce, the 'laws' of economics indicate that prices will rise inexorably.

Well, it's not as if the country is broke.

Some light reading: The Subprime Crisis - and the Middle East from Zawya.]]> Economy and finance Sue Hutton http://www.newsbriefsoman.info/index.php?itemid=432 Thu, 17 Apr 2008 23:44:30 +0100 Majlis al-Djinn cave closed http://www.newsbriefsoman.info/index.php?itemid=431 closure of the Majlis al-Djinn cave (Chamber of the Genie, in translation) to the public. It was discovered by Don Davison, an American hydrogeologist mapping the limestone plateau of Sharquiyah for the then Public Authority for Water Resources, in 1983. The PAWR published a brochure about the cave illustrating its immensity.

Adventure and ecotourism companies are irked, apparently, because they can no longer take paying visitors to go and see the site. I have some sympathy with the authorities over this. It's far more clear-cut to issue a total ban, rather than a permissive one when rangers might not be able to argue over permits and safety measures with persuasive guides. The location of the cave is relatively remote. Should a rescue operation be required, I suspect the public cost and logistics would be deemed untenable.

No such foibles seem to deter trekkers on the Snake Gorge challenge in Wadi bani Awf, which carves through the Al Hajar mountains south of Rustaq. You will note a warning on the page that the walk is dangerous. A friend of mine had to be airlifted out in 2001 after he misjudged a jump from a rock into a pool and hurt his back seriously.

I also remember the tragedy of June 1996 when eight hikers were swept down the gorge and drowned in a flash flood. I happen to remember returning from a walk on the beach in Muscat before 10 am that morning. Already, the clouds were tumbling over the top of the mountains, a sure sign of thunderstorms and rain later in the day.

Never be caught in a wadi if there is the slightest suspicion of rain.]]> Tourism Sue Hutton http://www.newsbriefsoman.info/index.php?itemid=431 Tue, 15 Apr 2008 12:44:58 +0100 Economic measures, petrodollars, social responses, Windows, water and Bear Stearns http://www.newsbriefsoman.info/index.php?itemid=424
It does seem to me that Oman is following one of its time-honoured traditions. Do nothing, and matters will change in time of their own accord.

Rising inflation is not unique to Oman, although the rate is growing alarmingly there as well as in the other Gulf countries. Broadly speaking, it seems that there is a dysfunction between macroeconomic measures, commitment to national investment and microeconomic reality. Agreements that were signed years ago must be respected and bills must be paid. It's imperative to retain those sovereign financial ratings.

To discuss inflation in Oman in any meaningful way, I need time to think and look up items. That won't be today.

Instead, here are some small items that have appeared in the media recently.

Last Saturday's Financial Times reported briefly the results of an experiment to determine whether 'freeloaders' will accept punishment from or retaliate against society.
Students in 16 cities around the world played a "public goods" game, in which everyone is given monetary tokens. They could either keep the tokens for themselves, or put them into a common pot that yields extra interest to be shared between all the players, whether or not they contributed to the pot. After one round, everyone's contribution is revealed and players can "punish" each other by taking tokens away.

National differences emerged in subsequent rounds. In some cities the freeloaders took revenge and hit back at their punishers, ultimately decreasing collaboration and cutting everyone's earning to very low levels. This "anti-social punishment" took place mainly in what the authors call "more traditional societies based on authoritarian and parochial social institutions", including Saudi Arabia, Oman, Russia, Belarus, Ukraine, Greece, Turkey and South Korea.
Which rather implies that Omanis are more likely to adopt a dog-in-the-manger attitude at an individual level.

A week before that, the FT also published an article from a Morgan Stanley analyst suggesting that petrodollars, ie, the money earnt by oil producers at current high prices, could affect the value of the dollar and the euro severely. He foresaw a massive switch of Gulf investment into emerging market currencies, let alone Sovereign Wealth Funds, including Oman's State General Reserve, which are regarded with much suspicion in the West.

A wizened seismologist blogged that his assignment in Oman had been completed. He lamented that the new IO Scorpion, a cable-based seismological land recording system did not meet field requirements. He blamed an over-dependence on Windows operating systems and IT kiddies brought up on Microsoft wizards and more used to playing games than tackling real-world needs. Nothing to do with Oman directly except that it reminded me of a situation in my own place of work in Oman a decade ago, when expat administrators took the decision to go with Windows based software rather than listening to old established IT experts. It could also be a cautionary tale when it comes to implementing e-government solutions. Impartial advice is still needed on proposed projects, even though Oman hosts a Microsoft training centre.

I wonder what impact KOM's e-games conference will have when it happens in April. I'm sure the participants will enjoy their sojourn in Muscat. I installed Second Life a couple of years ago and abandoned it after one hour, deciding that real life was more urgent than a virtual one. I also noticed a host of unclad dummies hovering around the entrance. Presumably the debris from others who couldn't work out how to clothe their avatars. The workshop on the second day of the KOM conference does at least suggest that participants will learn how to personalise their own avatars. Will gaining "an understanding of how to get the most from the environment" mean that they will also learn how to spend real money in a virtual world? I'm quite sure that buying virtual funds means parting with real cash.

I'm interested in the notion that gaming could be used as a training and heritage tool though. I'd like to know where else in the world heritage has been supported by serious gaming solutions. My 17 year old son is 'into' gaming. He's heard of Second Life, but is infinitely more interested in competing against his mates on 'World of Warcraft.' Before he could afford gaming over the Internet, he did enjoy playing Age of Empires, and The Romans. He said he learnt a lot of history by playing out the battles. Is that the same as promoting heritage through gaming? It might be useful if KOM would put papers up on its website afterwards.

Oxford Business Group's weekly round-up discussed inflation in Oman.
The [rent] committee also recommended boosting agricultural output by providing technical and financial assistance to primary producers, including establishing projects to increase cattle, sheep and poultry farming [ ]. At the same time, imports of live cattle and goats from neighbouring countries should be allowed, as long as health standards [are] met, said Ali Sultan (minister of commerce and industry.
Where will the water and feed come from to nourish these additional home-produced animals? Hasn't Oman virtually eschewed water resources management in favour of desalination, which is still the most costly way of providing water? I don't count recharge dams as an effective water resources management feature. The return on the water recharged by the dams that may be used for supplying agriculture and domestic needs is unlikely to come anywhere near the costs of building the dams in the first place.

Just in case someone hasn't noticed, wheat-based animal feed products have increased in price by tens of percent. Animals are being slaughtered in UK because farmers can't afford to feed them.

Finally, Gulf countries are reckoned to have largely avoided the effects of the sub-prime mortgage debacle in the USA and the resulting credit crunch. Earlier this week, shares in Bear Stearns, a US finance company, plunged more than 11 percent, despite intervention by the Federal Reserve. I seem to recall that Bear Stearns was underwriting, or perhaps it's more appropriate to say arranging finance, for a major construction project in Oman.

Relax. Shares in Bear Stearns recovered after Chief Executive Alan Schwartz said on Wednesday that the company has hefty cash reserves that have remained little changed this year.

Addendum, 14th March 2008: The day after I wrote the last two paragraphs about Bear Stearns, news came today that the company had approached the US Federal Reserve for emergency funding to enable it to continue trading. The stock plunged in value by over 50 percent as a result. The bank JP Morgan Chase is also said to be offering help. Seems to me then that the CEO was being less than economical with the truth, particularly as his latest statement says that his bank can "make no assurance that any strategic alternatives will be successfully completed.” I think I'd be feeling a bit concerned if I was an investor in that Oman construction project, unless of course, the scheme has been entirely refinanced. This is where transparency would be useful, if we could know what the arrangements are.]]> General Sue Hutton http://www.newsbriefsoman.info/index.php?itemid=424 Thu, 13 Mar 2008 14:00:32 +0000 Oman Air - fly me! http://www.newsbriefsoman.info/index.php?itemid=423 Morocco in November and in Jordan in January Follow the links for photographic evidence.

We flew to Aqaba from Gatwick where we were pleased to see Oman Air advertising on the departures screen. On our return, a hoarding facing us on the arrival ramp declared 'Muscat'. It's been very unusual to see advertising for Oman holidays, so I was taken by surprise. I did wonder what the backing photo was supposed to show, but, well, views of white villas surrounded by green trees looks nice enough.

In terms of press relations and media announcements, it seems that Oman Air has been very active over the last twelve months compared with other Omani companies. So it was with interest that I went to the Khaleej Times article this morning to read about the rebranding of the airline with its new logo.

I would have liked to have gone to a newly relaunched website for Oman Air to see the new logo and read about the company's operations, but there was no link provided in the article.

Instead, I guessed, and typed in www.omanair.com in the address bar. But what happened? It wasn't as if I got a Page Not Found message. No, the browser redirected me to a travel safety advisory notice at Smart Traveller Australia - a government service which provides information to its citizens about the dangers, or otherwise, of global destinations.

No matter how I clicked on links within the site, the address bar remained committed to www.omanair.com, even when I clicked through to the British Foreign and Commonwealth Office advice section.

A Google search did not bring up a website for Oman Air. I'm sure there must be a website somewhere, but I guess the copy on the site has not been so well written as to bring it to Google's attention.

I also looked up Smart Traveller Australia while I was about it. Here is the page to which you will be directed if you guess, like I did, www.omanair.com. I quote: "We advise you to exercise a high degree of caution in Oman because of the high threat of terrorist attack."

That's not exactly geared to encouraging tourism I would have thought. Ironic, particularly as another Australian website regularly publishes travel features about Oman.

Just to be sure, I tested this in two different Internet browsers, in case it was a browser mistake, but got exactly the same results. Has someone been hacking?


As an aside, I was extremely irritated by an advert in Flash on the Khaleej Times page, which had no Close option, and which obscured the text of the article I wanted to read. Khaleej Times please note - offering your readers the opportunity to turn off unwanted Flash adverts is a sign of a professional organisation.]]> General Sue Hutton http://www.newsbriefsoman.info/index.php?itemid=423 Mon, 25 Feb 2008 12:49:16 +0000 Renaissance Services - Oman's multinational http://www.newsbriefsoman.info/index.php?itemid=421 Reuters published in Trade Arabia a week ago announced that Renaissance Services expected to sell one of its business divisions by the end of December and another two in 2008. Reuters emphasised that neither possible buyers nor a selling price had been quoted.

Of course, this isn't really news. Both the chairman's and the CEO's reports for 2006 refer to divestment of the Technology (IMTAC), Media and Communications and Education and Training arms of the group in order to concentrate on the core business of services to the oil and gas industry.

It will be news when we learn who the new owners are and what they paid for the businesses.

It's quite easy to see how the three peripheral groups don't fit into the picture. These businesses focus very much on business within Oman and therefore the opportunities to expand and the profits to be made are many times smaller than in the oil and gas service services, which are international in scope.

The financial results for the nine months up to the end of September 2007 show that the marine, engineering and contract services groups collectively made something like 100 times more income compared with that earned by the combined operations of technology, media, communications, education and training. Now I'm not at all sure that I've read the balance sheet right, but if you want to check figures, this was what I worked out from page 6 of the interim report for 2007.

Overall, there was a growth of 14.3% in net profit compared with the same period in 2006.

This doesn't mean that the technology, media and training businesses are failing, although Renaissance did close down a training company in 2006. Far from it. Rather, the group is focusing on developing these businesses to market them as attractive, viable companies to potential buyers. The 2006 company report acknowledged that Renaissance had a strategic plan to concentrate on core business and that it was considering divestment with the full knowledge, and presumably cooperation, of employees and managers.

The Media and Communications group publishes several magazines, including Oman Economic Review, runs PR, events' organisation, media representation, website design and advertising units as well as having an interest in an advertising company in Qatar.

The Education and Training Group boasts both NTI (National Training Institute - ISO 9001:2001 certified), which offers vocational training in Health and Safety, driving and road safety, languages, IT, management and finance etc, while NHI (National Hospitality Institute) aims to equip young Omanis with skills in the hotel and catering industry.

A sentence in the CEO's report for 2006 interested me. "Within ETG, NTI also closed down its loss-making technical training facilities engaged in government-funded vocational training." The CEO went on to say that training for the oil and gas industry was profitable and had high growth potential. The training company which Renaissance closed had also relied heavily on its bids for government funded training.

Why wasn't this government-funded training profitable? Did payments come in? Were margins too small? Were expectations too high? Were there restrictions and constraints? And if so, in what way?

Your comments are welcome.]]> Business and industry Sue Hutton http://www.newsbriefsoman.info/index.php?itemid=421 Sun, 30 Dec 2007 20:56:26 +0000 Photos of aftermath of Cyclone Gonu in the gallery http://www.newsbriefsoman.info/index.php?itemid=391 newsbriefsoman photo gallery.

They were taken in Al Ghubrah, Al Athaibah, Ghala, Al Ansab Dam and in Wadi Adai, including the shopping centres at Qurum which stand on the banks of the wadi. It's said that bodies were discovered in the waters in the basement, presumably of looters who had entered the building after dark and fallen in.

The wadi deposited metres of sediment in and around the shops. If you want to understand why you should never camp or drive in a wadi when it is threatening rain, I recommend looking at photos DSC02703 and DSC02705 which show what happens to anything or anybody that gets in the path of a flash flood.

I'm told that Al Ansab dam did not fail. It's just that there was so much water, it just washed over the side channel overflow.

The emphasis is very much on material loss in these photos. After all, compare the images of upended cars in Muscat with photos of people on the sub-continent who also lost what few possessions they had in this year's heavy monsoon rains.

Government has already begun distributing compensation. Saleh Al-Shaibany recently chastised those who claimed government money to replace just a few losses in their homes such as a TV sest, justifying it as claiming their "share of the state revenues" when others had lost everything, with only the clothes they were wearing to call their own.

It would be nice now to see photos of these same areas to show just how the cleanup operation has gone.]]> General Sue Hutton http://www.newsbriefsoman.info/index.php?itemid=391 Sun, 28 Oct 2007 14:34:35 +0000 How might the USA's newly announced economic sanctions on Iran affect Oman? http://www.newsbriefsoman.info/index.php?itemid=389 announced new economic sanctions against Iran claiming that the Islamic Republic was destabilising the Gulf region by sponsoring terrorist groups. The statement referred to threatening and irresponsible behaviour by Iran. Also see the BBC news story.

President Putin of Russia quickly warned the EU against following the USA's lead. It may seem incredible to some, but the USA is seriously out of step with the rest of the world in the way that it regards the Islamic Republic. Wikipedia tells us that Iran's major trading partners are China, Germany, South Korea, Japan, France, Russia and Italy.

The most active foreign direct investors are Germans, Norwegian, British, French, Chinese, Japanese, Russian, South Korean, Swedish, and Swiss companies.

In 2005, the volume of Iran-China trade hit $US 9.2 billion. China held the third rank among top exporters to Iran (2005) with 8.3% of the total market, after top ranked Germany (13.9%) and UAE (8.4%). Chinese companies have 25-year contracts to import LNG from Iran. China's share of Iran's exports is given as 11.2% with Japan the top importer at 16.9%.

Another figure gives Germany the largest share of Iran's export market with $5.67 billion (14.4%).

Oman has adopted a significantly more positive approach to Iran than its Gulf neighbours. There is regular rapprochement between the two countries, and efforts to increase trade. President Mahmoud Ahmedinejad visited the Sultanate in May this year, at the invitation of HM Sultan Qaboos bin Said, to discuss bilateral economic agreements, specifically with regard to the supply of natural gas to Oman, and to gain Oman's economic support for developing the Hengam (Henjam) oilfield , which adjoin's Oman's West Bukha oilfield, "developed by UAE-based Indago Petroleum".

"Henjam could hold between two to three times as much gas as West Bukha, which is more liquids prone. [ ] There have been previous MOUs between Oman and Iran for the development of Henjam, but a combination of politics, pricing policies and lack of attention by Iran, which has many larger fields to develop, has meant little progress has been made." Energy Intelligence

UAE and Kuwait have also been trying to establish gas supply agreements with Iran, but to date have been hampered by Iran's inability to develop gas supplies for export. Gulf News. "Iran's efforts to build its own LNG facilities have faced delays, in part because US sanctions on Tehran deter investors and block access to some technology." Menafn

As a partner in a bilateral trade agreement with the United States, one might expect, in the circumstances, Oman to be pressured to renege on agreements with Iran.

Perhaps much depends on how one defines the companies that one deals with in Iran. Are they simply private sector Iranian companies or do they belong to the Islamic Revolutionary Guard Corps? Since the State, which incorporates the IIRGC, owns all mineral rights, then the latter proposition is probably true. I can imagine that the Omani authorities are in a quandary, since it is particularly this group that the USA is targeting.

Let's look at some details. In May 2007 Energy Intelligence wrote "Oman expects to import 1 billion cubic feet per day (10.3 billion cubic meters per year) of Iranian gas over the next five years -- some of which could be exported via Oman's LNG terminal or be used as feedstock for petrochemical projects.

Iran and Oman signed a memorandum of understanding to study gas fields around the Musandam Peninsula on the Omani side of the Strait of Hormuz, on Tuesday (IOD May.16,p8). It is the latest agreement signed between the two countries, which have tried for the last decade to get a joint gas development program for Henjam off the ground."

Oman has significant gas reserves of its own, which it exports overseas to raise revenue and uses as energy supplies for its own industrial infrastructure. "According to OGJ (Oil and Gas Journal), Oman’s proven natural gas reserves stood at 30 trillion cubic feet (Tcf) as of January 2007. [ ] However, despite the recent rise in production, additional natural gas reserves have not been located as quickly as the government had hoped. Some industry sources have speculated that, given the country’s long-term liquefied natural gas (LNG) export obligations, natural gas supplies may be overcommitted in Oman." EIA

Oman needs the gas. Apparently, the Sultanate offered "generous proposals [to Iran], which included signing an upstream deal and building an offshore pipeline, in the hope of reaching a quick agreement on the import of up to 70 million cubic meters per day of natural gas." Energy Intelligence, May 2007.

If gas is discovered in sufficient quantity in the Hengam field, it will be transferred by pipeline, which has yet to be built, or it could be piped to northern UAE where it would be swapped with Qatari gas from the Dolphin Gas Project. Oman has the facilities at Qalhat to convert the gas to LNG (liquefied natural gas), when can then be exported by bulk carrier. Presumably the gas can be piped directly to where it is required in country.

A Reuters' report reprinted in Qatar's English-language newspaper, The Peninsula, of 27th June this year, quoted Oman's Commerce and Industry Minister Maqbool bin Ali Sultan, who signed the deal with Iranian Oil Minister Kazem Vaziri-Hamaneh, as saying, “In future Oman needs a huge amount of gas, so we are negotiating with Iranian officials to buy gas from Iran. The joint cooperation project ... does not include just gas imports but also exploring, extraction and transfer by pipeline to Oman.”

Another obstruction to agreement has been Iran's insistence on pricing its gas according to the use to which Oman puts it. So the price would presumably be higher for gas that was earmarked for export, since gas used in country has a price fixed by government at $1.50 per million Btu. Oman would rather have a single price system.

The Tehran Times reported on 20th October that talks on the export of Iranian gas to Oman were going well, and were expected to be finalised in March 2008, in time for the Iranian New Year.

Earlier this week, HH Sayyid Fahd bin Mahmood al Said, Deputy Prime Minister for the Council of Ministers, led a high-ranking delegation of ministers to Qatar, for talks with Shaikh Hamad bin Khalifa al Thani, Emir of Qatar, and his heir apparent, Sheikh Tamim bin Hamad Al Thani. The visit has been largely unreported in the international press. The Times of Oman led with the usual commentary about brotherly discussions and review of existing cooperation between the two countries in political, economic, social and educational fields, but did emphasise that the talks focused on the supply of gas.

Sayyid Fahd was accompanied by Yousuf bin Alawi bin Abdullah, minister responsible for foreign affairs; Maqbool bin Ali Sultan, minister of commerce and industry; Mohammed bin Ali bin Nasir Al Alawi, minister of legal affairs; Dr Mohammed bin Hamad Al Romhi, minister of oil and gas and Hamed bin Mohammed Al Rashdi, minister of information - a formidable team.

Of course, this is probably a coincidence, but did one or other of the two parties have prior information about the new US sanctions? If the Iranian deal is going to fall through, Oman absolutely needs to have faster, securer access to Qatari gas.]]> International relations Sue Hutton http://www.newsbriefsoman.info/index.php?itemid=389 Sat, 27 Oct 2007 18:53:24 +0100 Was the Press Club moribund? http://www.newsbriefsoman.info/index.php?itemid=388
Does this mean that the Press Club was totally moribund, since all fixed and movable assets are now transferred to the Ministry of Information? What did it do, if anything?

Does the new decree have any impact on press freedom and rights of journalists, or have these been enshrined elsewhere?

Maybe a member of Oman's press corps will be able to explain.]]> General Sue Hutton http://www.newsbriefsoman.info/index.php?itemid=388 Mon, 22 Oct 2007 00:13:33 +0100