Tadawul gains on economic optimism

Updated 30 December 2012
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Tadawul gains on economic optimism

Saudi stocks closed slightly higher yesterday after the government announced a 2013 state budget, which analysts said was likely to support continued strong economic growth next year.
The Tadawul All Share Index gained 0.2 percent, the most since Dec. 22, to 6,877.06 at the close.
The market declined early on in response to a drop in global oil prices on Friday, but rebounded after the budget details were released.
Analysts, quoted by Reuters, said the budget announcement was not a surprise, but it was seen as mildly positive for domestic demand-related stocks.
The market gained, even though petrochemicals fell slightly in response to the global picture, with Saudi Basic Industries Corp (SABIC) down 0.3 percent.
The Saudi index has gained 7.2 percent this year after falling 3.1 percent in 2011.
Samba Financial Group (SAMBA) rose the most yesterday since Dec. 19. Kingdom Holding Co. closed at the highest level since March 2008, said a Bloomberg report.
“Although external factors might seem negative due to the US fiscal cliff, Saudis are enthusiastic about the Saudi fiscal budget for this year which is affecting the market in a positive manner,” Mohammed Al-Omran, financial analyst and president of the Gulf Center for Financial Consultancy in Riyadh, was quoted as saying in the Bloomberg report.
The Standard & Poor’s 500 (SPX) Index dropped 1.9 percent last week, the biggest such decline in almost two months, as investors await the outcome of budget talks by US lawmakers to avert the so-called fiscal cliff.


Shell, Exxon not to seek compensation for end of Dutch gas field production

Updated 26 min 37 sec ago
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Shell, Exxon not to seek compensation for end of Dutch gas field production

AMSTERDAM: Energy companies Royal Dutch Shell and Exxon Mobil will not submit a claim for missed revenue due to the Dutch government's decision to halt gas production at the Groningen field by 2030, the Dutch ministry of Economic Affairs said on Monday.
"A lot of gas will be left in the ground," Economy minister Eric Wiebes said at the presentation of his deal with the oil majors responsible for extracting Groningen gas.
"That gas is the property of the oil companies, but they will not submit a claim and the government is not required to compensate them."
The Dutch government in March said it would end gas production at the Groningen field by the end of the next decade, in an effort to stop a string of relatively small, but damaging earthquakes caused by gas extraction.
This will leave around 450 billion cubic meters (bcm) of gas in the ground, Wiebes said, with an estimated value of approximately €70 billion ($81.5 billion).
The decision to halt Groningen production forced the government to broker a new deal with Shell and Exxon Mobil, whose 50-50 joint venture NAM is responsible for the field.
NAM will be required to pump as much gas as the government says is needed in the coming years. In return, it will see its share of the revenue from Groningen rise from 10 to 27 percent, Wiebes said, starting this year.
As part of the deal, NAM will also contribute a total of €500 million to strengthen the economy in the Groningen region.