Qatar tactics questioned after ‘soft power’ deals with France

French President Emmanuel Macron (L) and Qatari Emir Sheikh Tamim bin Hamad Al-Thani (R) watch as their foreign ministers sign bilateral agreements in the Qatari capital Doha on Thursday, December 7, 2017. (AFP)
Updated 13 December 2017
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Qatar tactics questioned after ‘soft power’ deals with France

LONDON: Qatar signed $14.15 billion in deals with France on Thursday, including the purchase of 12 fighter jets, in what has been described as a “soft power” play. 
The deal was signed during President Emmanuel Macron’s visit to Qatar with Foreign Minister Jean-Yves Le Drian, who in 2015 as defense minister helped negotiate a deal with Qatar to buy 24 Rafale fighter jets.
Qatar exercised its existing right to purchase 12 more, bringing the total number of Rafales the Gulf Arab country will have to 36.
Middle East expert Zaid Belbagi referred to the move as a reflection of “soft power.”
“There is a more tactical way to do this,” Belbagi told Arab News. He explained that in this deal, the “real winner” is France, which has become $14.15 billion richer. According to the French government, Qatar has agreed an option for another 36 planes. In addition to the fighter jets Qatar also committed to buying 490 armored vehicles from defense firm Nexter.
Professor Anoush Ehteshami, director of the Institute for Middle Eastern and Islamic Studies at Durham University, said that the deal was partly for show.
“This is not a military response,” Ehteshami explained, saying it marks Doha’s aim to “show they have strategic partners.”
He added, “it’s one thing to buy them and its another thing to use them — I don’t think they will buy any more anytime soon.”
Macron’s one-day trip to Doha comes a week after the Gulf Cooperation Council met in Kuwait to discuss the ongoing dispute. Saudi Arabia, the UAE, Bahrain and Egypt cut relations with Qatar over its alleged support of extremists and funding of terrorist groups. Doha denies the claims.


Sipchem tops bumper earnings from Saudi petrochemical majors

Updated 55 min 46 sec ago
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Sipchem tops bumper earnings from Saudi petrochemical majors

LONDON: Saudi petrochemical producer Sipchem said its third-quarter profits surged by about half to SR180.3 million ($47.9 million) amid a brace of strong earnings from the sector.
The company also known as Saudi International Petrochemical Co, plans to merge with Sahara Petrochemicals as a wave of consolidation sweeps through the industry.
CEO Ahmad Alohali told Al Arabiya that the company’s third quarter performance was encouraging. 
“Product prices varied,” he said. “Prices of nine of our products rose between 14 percent and 30 percent, as every product has its own dynamics. Production efficiency of Sipchem’s plant also improved.”
He also told the broadcaster that the ongoing US-China trade war could affect Sipchem, making it shift shipments from one market to another, he said.
Elsewhere, Yanbu National Petrochemical, also known as Yansab, overcame an increase in some of its feedstock costs to record a 13 percent jump in third quarter net profit to SR729 million compared to a year earlier.
It said the increase in profitability was down to higher average selling prices for most of its products.
Meanwhile, Saudi Kayan Petrochemical said net profit for the period rose by about 24 percent to SR471.9 million compared with a year earlier.

 

 An improvement in productivity at some of its plants helped to drive profits higher, it said in a filing.
Saudi petrochemical producers from SABIC to Sahara are seeking to boost output and efficiency while oil companies such as Saudi Aramco are also increasingly looking at crude to chemicals technology to tap into the changing industry demand drivers.
Petrochemicals are set to account for more than a third of the growth in world oil demand to 2030, and nearly half the growth to 2050, adding nearly 7 million barrels of oil a day by then, according to the International Energy Agency (IEA).
“Our economies are heavily dependent on petrochemicals, but the sector receives far less attention than it deserves,” said Fatih Birol, the IEA’s executive director.
“Petrochemicals are one of the key blind spots in the global energy debate, especially given the influence they will exert on future energy trends. In fact, our analysis shows they will have a greater influence on the future of oil demand than cars, trucks and aviation,” said Birol in a report earlier this month.
The Middle East remains the lowest‑cost center for many key petrochemicals.
Saudi Arabia and the wider Middle East are at the lower end of the cost curve among petrochemical-producing regions for primary chemical production.
Currently the region accounts for 12 percent of the global production of high-value chemicals, 9 percent of ammonia production and 15 percent of the methanol market.
In addition it also has huge growth potential with 90 percent of naphtha output currently exported instead of being used as petrochemical feedstock because of the ample availability of
natural gas.

FACTOID

12%

The Middle East accounts for about 12 percent of the global production of high-value chemicals.