Baghdad slams oil deal between Russia’s Rosneft and Kurds

An Iraqi oil employee checks pipelines at Bai Hassan oilfield, west of Kirkuk. (AFP)
Updated 19 October 2017
0

Baghdad slams oil deal between Russia’s Rosneft and Kurds

BAGHDAD: The Iraqi Oil Ministry reacted angrily on Thursday after Russian energy giant Rosneft signed a production sharing deal with the authorities in the autonomous Kurdish region without its approval.
The agreement came hot on the heels of Baghdad’s recapture from Kurdish forces of five oil fields in disputed territory outside the autonomous region in retaliation for an independence vote last month.
“This department and the Iraqi federal government are the only two bodies with whom agreements should be reached for the development and investments in the energy sector,” the ministry said in a statement, without mentioning Rosneft by name.
Oil Minister Jabbar Al-Luaybi condemned the “irresponsible announcements coming from certain officials in Iraq or abroad, or from foreign companies about their intention to conclude deals with parties in Iraq without the federal government being aware.”
“The federal government and the Oil Ministry are the only bodies responsible for developing oil and gas strategy and authorized to sign agreements with foreign countries and companies,” he said.
Rosneft announced on Wednesday it had signed production-sharing agreements for five oil blocks in Iraqi Kurdistan.
The state-controlled giant said it would pay up to $400 million (340 million euros) for 80 percent in the venture as part of the deal with the Kurdistan Regional Government (KRG), although up to half the sum could be paid in crude from the blocks.
Rosneft boss Igor Sechin on Thursday insisted that the company strictly followed the law and said that “if there are problems between the government of Iraq and Kurdistan then they need to solve the problems themselves.”
“I am not a politician, my job is to produce oil,” Sechin, a top ally of President Vladimir Putin, was quoted as saying by Russian news agencies.
A joint exploration program and pilot production is to start next year. If successful, Rosneft said it would start full-field development of the blocks in 2021.
Recoverable oil reserves at the five blocks are around 670 million barrels, Rosneft said, calling the estimate “conservative.”
Rosneft and Iraqi Kurdistan are already cooperating on crude purchases and sales, but the new deal “will allow us to talk about full-fledged entry of the company in one of the most promising regions” of the developing global energy market, Rosneft said.
Meanwhile, Falah Mustafa Bakir, head of the KRG department of foreign relations, told broadcaster CNN in an interview that the KRG never intended to engage in a war with the Iraqi Army.
‭ There is a need for dialogue between KRG and Iraq so as to reach a common understanding, Bakir said, according to a transcript of the interview published on KRG’s website, adding the dispute was not about oil or the national flag but about the future of two nations.
The KRG said it welcomed Iraqi Prime Minister Haider Al-Abadi’s call for talks to resolve the crisis, Irbil-based Rudaw TV said.
Al-Abadi called for dialogue on Tuesday, saying he considered last month’s referendum “a thing of the past.”


Saudi insurance stocks soar as female drivers take to the road

Saudi Majdoleen Mohammed Alateeq, a newly licensed Saudi driver, gets out of her car in Riyadh on Sunday. The insurance sector is just one segment of the economy set to benefit from the lifting of restrictions on women drivers in the Kingdom. AFP
Updated 25 June 2018
0

Saudi insurance stocks soar as female drivers take to the road

LONDON: Saudi insurance stocks surged on Sunday, with investors expecting the sector to reap significant dividends following the lifting of the ban on female drivers.
Insurance stocks — one of the worst performing sectors on the Saudi bourse for the year to date — outperformed other classifications on Sunday, ending 2.4 percent higher, compared with a 1.8 percent rise for the Kingdom’s headline index.
Amana Insurance and AlRajhi Takaful were the best performers of the day, gaining 9.9 percent each. Tawuniya, the Kingdom’s largest insurer, ended Sunday 1.1 percent higher, with only one of the country’s 33 listed insurance providers closing lower for the day.
The lifting of restrictions on female drivers — which came into effect on Sunday after first being announced in September — is part of a series of wide-ranging reforms introduced as part of Saudi Arabia’s Vision 2030 economic transformation program, designed to diversify the economy away from a reliance on oil revenues.
The advent of women drivers is forecast to benefit the economy by significantly increase female participation in the workforce, and stimulating financial, insurance and retail sectors among others.
The insurance sector is set to draw particular benefit from the move, but may remain under pressure, according to rating agency S&P.
“We anticipate that efforts of the local authorities to tackle the large number of uninsured drivers, combined with the arrival of women drivers … and the introduction of additional benefits under the unified medical policy from July 1, will support further premium growth in the industry in the medium term,” said S&P in a research note in April.
“However, these factors may be offset by the large number of foreign workers that have already left or will be leaving the Kingdom in 2018.”
In spite of yesterday’s price surge, insurance stocks are 8.4 percent lower for the year to date. Tadawul as a whole is up 15.6 percent so far this year, making the bourse one of the world’s best performers for 2018.
Investor sentiment on Sunday was also boosted by investor optimism after index provider MSCI announced last week that it would upgrade Saudi stocks to its Emerging Markets Index from next year.
The widely anticipated upgrade — which puts Saudi equities on an index tracked by around $2 trillion worth of global assets — is expected to attract up to $40 billion of international funds, Tadawul CEO Khalid Al-Hussan told Arab News last week.
MSCI’s upgrade came after a similar move by fellow index provider FTSE Russell in February, which is also scheduled to come into effect from next year.
Banks were among the other bright performers on Tadawul on Sunday. Arab National Bank led gains, closing up 4.2 percent, while blue-chip names NCB and AlRajhi rose 1.6 percent and 2.3 percent respectively.
Some petrochemical companies also added value, Reuters reported, following a rise in oil prices after OPEC decided on only modest increases in crude production last week.
Outside Saudi Arabia, Gulf markets posted minor gains. In Dubai, where the index was flat, Air Arabia was unchanged. Shares in the airline have declined by more than 10 percent since early last week, when the company said it had hired experts to protect its business interests in private equity firm Abraaj, which has filed for provisional liquidation. The airline said its exposure was around $336 million.
Last week, the UAE’s securities regulator asked listed companies to declare their exposure to Abraaj.