Saudi-Russian Talks on Oil Output Agreement ahead of OPEC Meeting

OPEC

Moscow — Saudi Arabia hopes to reach an agreement with Russia on what to do when a global oil output deal expires in March, before an OPEC meeting in November, Saudi Energy Minister Khalid al-Falih said in Moscow on Friday.

“I am looking forward to reaching consensus working with you in the next few weeks before we have the November 30 meeting and bring our colleagues from around the world…,” Falih told his counterpart Russia’s Energy Minister Alexander Novak.

“As satisfied as we are with the progress made, I think you agree that our job is not done and there are still uncertainties and headwinds on global oil markets and we have to keep our eyes clearly on the road and our hands on the wheels,” he added.

The Russian Energy Ministry said on Friday that Falih and Novak have signed a programme for cooperation between their two countries in the energy sector, Reuters reported.

The current global oil output cut deal between OPEC and some non-OPEC nations expires at the end of March 2018. Russia and Saudi Arabia are among the leading oil producers in the deal.

Saudi-Russian Scenario to Extend OPEC Agreement till End of 2018

Saudi Arabian Energy Minister Khalid al-Falih attends a meeting of the 4th OPEC-Non-OPEC Ministerial Monitoring Committee in St. Petersburg, Russia July 24, 2017.

Kuwait- Russia and Saudi Arabia’s remarks Thursday have revived oil markets and hopes of another year of trying to rebalance the oil market after the Kingdom showed its support for the Russian proposal to extend the current global agreement between oil-producers until the end of 2018.

Oil rose above $56 a barrel on Thursday, supported by expectations Saudi Arabia and non-OPEC member Russia would extend the curbs, but prices are still half their mid-2014 levels.

Saudi Energy Minister Khalid al-Falih was speaking in a television interview a day after Russian President Vladimir Putin said the supply reduction deal that is due to expire in March could run to the end of next year.

“In the kingdom, we have to keep all options open, President Putin agreed with us on this and expressed his readiness to extend until the end of 2018 if this is agreed, and if this is the best option,” Falih told Al Arabiya television.

Saudi Arabia and Russia helped secure a deal between the Organization of the Petroleum Exporting Countries (OPEC) and 10 rival suppliers to cut output until the end of March 2018 in an effort to reduce a glut.

Falih said he welcomed the “flexibility” shown by Russia on the issue and added the Saudi government aimed to “be flexible in leading the producing countries in and outside of OPEC to a consensus that takes the market to where we want it to be.”

Bloomberg quoted last month sources as saying that OPEC and non-OPEC producers and countries are studying the extension of the agreement for at least three months, and it is expected to extend for six months or until the end of the year.

Falih, who is also Aramco’s chairman, said on Thursday that the IPO would happen in the second half of 2018, adding that the listing would be used as a “catalyst” for opening up the Saudi economy.

“Work is ongoing to list Saudi Aramco in 2018,” Aramco’s Chief Executive Amin Nasser said at an energy forum in Moscow.

We will be looking at evaluating investors as we continue to make progress related to timing and location.”

Nasser said the Saudi government would decide on the listing venue and that there were no current talks with Russian companies on them taking part in the IPO.

The plan to float around 5 percent of Aramco in an initial public offering (IPO) is a centerpiece of Vision 2030, a wide-ranging reform plan to diversify the Saudi economy beyond oil which is being championed by Saudi Crown Prince Mohammed bin Salman.

The Saudi Crown Prince said that the IPO, which could be the world’s biggest, will value Aramco at a minimum of $2 trillion and could raise as much as $100 billion.

When talking about Shale oil, Falih said inventories were still falling despite the fact that climbing US shale production has kept a lid on price gains.

“Shale coming in and happening again in 2018 doesn’t bother me at all. The market can absorb it,” Falih said, speaking alongside Russian Energy Minister Alexander Novak on a panel at an energy forum in Moscow.

“We have seen a steady reduction in inventories. We see as we enter the fourth quarter that supply is less than demand and inventories are declining around the world,” Falih said.

Novak said he was satisfied with oil prices and Moscow would welcome other producers joining the deal to curb output.

IMF Commends Saudi Reforms within Vision 2030

Washington, Riyadh — Timothy Callen, IMF Mission Chief for Saudi Arabia, lauded the reforms implemented by Saudi authorities within Saudi Vision 2030 from “adjusting fiscal policy to the realities of lower oil prices,” enhancing the business environment and increasing transparency.

Callen also praised the kingdom’s permission for women to drive, noting that it is a great step in the field of encouraging recruiting, productivity and women participation in the labor force.

In a news conference on the outcomes of Article IV Consultations with Saudi Arabia and the issuance of Financial Sector Assessment Program (FSAP), lead researcher Mostafa El-Sayed and Timothy Callen asserted that the Saudi authorities succeeded in adopting reforms that led to the decline of the deficit in a high rate.

Saudi Finance Minister Mohammed al-Jadaan welcomed the report that clarifies the positive impact of economic reforms performed by the kingdom within Saudi Vision 2030.

IMF staff commended Saudi Arabia’ efforts to enhance non-oil revenue and welcomed its plan for further energy price reforms. They welcomed recent improvements in the fiscal framework and fiscal transparency, as well as the findings of the Financial System Stability Assessment report that showed banks are well regulated and supervised.

They also mentioned the good progress being made in identifying and removing obstacles to private sector growth, but stressed that increasing the employment of Saudi nationals in the private sector was essential.

According to the report, non-oil growth is projected to pick up to 1.7 percent in 2017. The fiscal deficit is projected to narrow substantially in the coming years. It is expected to decline from 17.2 percent of GDP in 2016 to 9.3 percent of GDP in 2017, and to just under 1 per cent of GDP by 2022.

Riyadh, Moscow Sign MoUs in Nuclear Energy, Other Fields

Saudi Energy Minister Khalid al-Falih said on Thursday that King Salman’s historic visit to Russia will witness the signing of memoranda of understanding in several fields.

The visit shows the high degree of mutual trust between Russia and Saudi Arabia, Falih said, speaking alongside Russian Energy Minister Alexander Novak as part of a panel discussion at an energy forum in Moscow.

“This historic visit will witness the signing of memoranda of understanding (MoUs) in several fields that are important to both countries,” Falih added.

He said MoUs would be signed with Russia for the peaceful use of nuclear energy as well as other agreements for military industries and marine development.

Russia and Saudi Arabia have helped stabilize crude prices, the minister stated.

Saudi Arabia and Russia have helped secure a deal between OPEC and 10 suppliers to cut output until the end of March 2018 in an effort to reduce a price-sapping glut.

Falih was speaking in a television interview a day after Russian President Vladimir Putin said the supply reduction deal that is due to expire in March could run to the end of next year.

“In the kingdom, we have to keep all options open, President Putin agreed with us on this and expressed his readiness to extend until the end of 2018 if this is agreed, and if this is the best option,” Falih told Al Arabiya television.

He said he welcomed the “flexibility” shown by Russia on the issue and said the Saudi government aimed to “be flexible in leading the producing countries in and outside of OPEC to a consensus that takes the market to where we want it to be.”

Falih said this week’s visit by King Salman to Russia showed the high level of mutual trust between the world’s two biggest oil producers.

The two nations would continue working to stabilize the market, King Salman told Putin. The king also said there were opportunities to expand economic cooperation with Russia.

Falih echoed these comments, saying: “I see huge opportunities in front of our countries and for the business sector in both nations.”

In addition to investment agreements and MoUs, plans for a $1 billion joint fund to invest in energy projects are also expected to be finalized during the king’s trip.

Falih said MoUs would be signed with Russia’s state nuclear agency Rosatom for the peaceful use of nuclear energy, alongside other deals for military industries and marine development.

State oil giant Saudi Aramco will sign several non-binding MoUs on Thursday with Russian companies Gazprom , Gazprom Neft, Sibur and Litasco.

Aramco is discussing several investment opportunities with Russian firms, Aramco Chief Executive Amin Nasser said.

The Russian Direct Investment Fund will sign an MoU with Aramco and the kingdom’s Public Investment Fund for investments in energy services and manufacturing.

National Investment Fund of $92 Billion to Invigorate Saudi Economy

Jeddah — The establishment of the National Development Fund (NFD) was meant to ensure new incentives for the Saudi economy with a capital of SAR 345 billion ($ 92 billion) pumped into the new fund.

The fund encompasses five other minor associate funds: the real estate fund standing at SAR 183 billion ($ 50 billion), the social development fund at SAR 46 billion (US $ 14 billion), the industrial development fund at SAR40 billion (US $ 1.5 billion), the Saudi development fund at SAR 31 billion (US $8.3 billion dollars), and the agricultural development fund of SAR 20 billion riyals (US $5.2 billion dollars).

The total capital of the five funds exceeds the capital of commercial banks operating in Saudi Arabia which stands at SAR 168.4 billion riyals ($ 48.8 billion) – placing the capital of the new entity close to twice as that of the combined capital of commercial banks.

Labor and Social Development Minister Dr. Nasser al-Ghafis said that “establishing the National Development Fund reflects the interest and keenness of the Kingdom’s wise leadership to continue supporting development programs and projects that serve the citizen directly and enhance national economy in line with sustainable development.”

Minister Ghafis stressed that the National Development Fund will raise the level of performance and productivity of funds and development banks in the Kingdom, working side by side with other government sectors to meet the aspirations of citizens in light of the economic development witnessed by the country.

The National Development Fund, which will supervise the functions of its affiliated bodies, will have a board of directors headed by the deputy prime minister and it will comprise a membership of not less than seven members nominated by the prime minister.

The board of directors of the National Development Fund will assume all tasks and powers, and make decisions, take progressive measures and other actions deemed necessary for establishing the fund.

The National Development Fund shall have a governor with a minister’s rank, who will be the executive officer of the fund.

Saudi Arabia Studies Issuing Three Banking Licenses, Establishing a Digital Currency

Saudi

Riyadh – The Saudi Arabian Monetary Agency (SAMA) expected positive growth rates for the Saudi economy over the upcoming period, confirming that the national economy achieved a 1.7% growth so far, compared to last year’s 3.5%.
SAMA’s report highlighted the non-oil sector maintaining a positive growth process.

The Saudi central bank has received three applications for banking licenses and is processing them is at an advanced stage, central bank governor Ahmed Al-Kholifey told a news conference on Wednesday.

He stressed that the liquidity levels is in a comfortable situation, noting that the institution is working to stabilize the exchange rate.

He explained that there is a study to create a digital currency for the purpose of buying products—however, noted that with the absence of a legal framework for the digital currency there may be risks and multiple consequences entailed.

He also pointed out that Saudi Arabia is currently conducting an evaluation process to obtain permanent membership in the Financial Action Task Force (FATF), saying that the institution carried out the evaluation process in cooperation with a number of other government departments, and will complete its evaluation in June 2018.

FATF is an inter-governmental body established in 1989 by the Ministers of its Member jurisdictions.

The objectives of the FATF are to set standards and promote effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist financing and other related threats to the integrity of the international financial system.

The FATF is, therefore, a “policy-making body” which works to generate the necessary political will to bring about national legislative and regulatory reforms in these areas.

Another central bank official said no more bank mergers were expected.

Alawwal Bank and Saudi British Bank agreed in April to start talks on a possible merger.

Officials painted a highly positive picture of the economy, saying growth was likely to strengthen and they were not worried by deflation.

Kholifey said that in light of indicators in the first half of this year, he expected positive results for economic growth in the coming period.

Another central bank official said the bank was not worried about deflation because consumption was rising.

Officials also said they saw no reason for the riyal to fall in the forward foreign exchange market, that liquidity in the banking system was good, and that there was no concern about banks’ bad loans.

Egyptian Discussions with AfDB on Last Tranche of Loan

Cairo- Egyptian officials have discussed with a delegation from the African Development Bank the signing of the third and last $500 million tranche of a $1.5 billion AfDB loan.

The discussions took place between Minister of Investment Sahar Nasr and Minister of Water Resources and Irrigation Mohamed Abdel-Ati on one side and the AfDB delegation led by the bank’s Vice President Khaled Sherif on the other.

Talks focused on the bank’s proposed funding for several projects and the measures taken by Egypt to improve the investment climate, including President Abdel Fattah el-Sisi’s approval of the investment law.

The two sides also discussed the signing of the $500 million loan agreement with the AfDB by the end of 2017.

Nasr stressed the importance of receiving the third and last tranche of the $1.5 billion loan and loaded the bank’s cooperation in backing the Egyptian government’s economic program.

The minister noted that the government’s top priority lies in providing better living standards for Egyptian citizens, and implementing projects, which provide employment opportunities for young people, women and the most needy families, and that improve the infrastructure such as electricity and transportation.

Nasr invited Sherif to the three-day Africa 2017 investment conference that will be held under Sisi’s patronage on December 7 in the resort of Sharm el-Sheikh.

The bank’s delegation expressed optimism at the economic reforms undertaken by the Egyptian government, saying the country should be a good magnet for more investments.

Sherif said that Egypt is a founding member of the AfDB and the second largest contributor in the bank, which finances 29 projects with a total value of $2.3 billion.

He also stressed the importance of holding the Africa 2017 investment conference for greater African integration.

French Development Agency’s Commitments to Tunisia to Reach 1.2 Billion Euros

Tunis- The French Development Agency (AFD) has renewed its EUR 1.2 billion commitment to finance projects over the next five years.

In a statement to TAP on the sidelines of a press conference held on Monday to celebrate the agency’s 25th anniversary, AFD Director Gilles Chausse recalled that the French authorities announced at the Tunisia 2020 conference, which was held in November 2016, the commitment of EUR 1.2 billion, which will finance investment projects part of the five-year development plan (2016/2020).

He said the AFD will focus on traditional intervention sectors, including vocational training, transport and agriculture and is expected to open on other sectors such as health, ICTs, social protection and governance in which a number of operations are already underway such as the governance of public enterprises.

Tunisian authorities are waiting for several countries, which had participated in the Tunisia 2020 international conference by making financial promises, to meet their pledges.

At the time Prime Min­ister Youssef Chahed said the investment conference enabled Tu­nisia to mobilize 34 billion dinars ($15 billion).

In this regard, Tunisian economic expert Saad Boumakhle said that the initiative of several international financial bodies to fund investment projects in Tunisia would have positive effects on the country’s economy, which is badly in need for such funds to provide job opportunities for hundreds of thousands of unemployed Tunisians.

The expert said a Tunisian-French program supports Tunisian exports to French markets, providing financial returns in hard currency if the doors for export were wide open to Tunisian institutions.

In 2016, AFD granted Tunisia donations of EUR 4.2 million following the signature of two funding agreements.

Strong Demand by Investors for Jordan’s ‘Eurobonds’

Amman- Jordan has successfully issued $1 billion worth of Eurobonds on international markets at an interest rate of 7.375 percent and under a maturity period of 30 years, according to a Ministry of Finance statement.

Underwriting applications for the bonds surpassed $4.3 billion; more than 400 per cent of the issuance value, the ministry said, adding that more than 240 investors, including major investment funds from the US, the UK and Europe participated in the underwriting.

Minister of Finance Omar Malhas said Tuesday that the issuance comes within “the set limits” in the General Budget Law, stressing that it will not push public debt above that targeted level and does not deviate from the government’s financial reform plans.

Malhas noted that Jordan has indulged in a financial reform program in cooperation with the International Monetary Fund to reduce the public debt ratio to GDP from 95 percent to 77 percent by 2022.

For his part, Secretary-General of the Ministry of Finance Ezzedine Kanakariya said the yield on these bonds would be used to finance the treasury’s needs, including paying off local bonds that will be matured by the end of the year.

He added that the issuance would secure the local private sector access to funding to implement its financial plans.

Notably, a team from the Ministry of Finance and the Central Bank made a tour last week to market the Eurobonds, during which the members met more than 60 international companies from the largest investment funds and presented the economic, financial and procedural developments and plans for implementing Jordan’s financial reform program.

Khalid Darwish from JP Morgan and Ziad Qutami from Citigroup managed the issuance process in global markets.

Jordan’s Ministry of Finance announced in April that it had successfully issued $500-million worth of Eurobonds on international markets.

The bond was sold with a yield rate of 5.875 percent, the ministry said.

Sluggish Housing Market Draws Buyers to Corsica

Corsica- This two-story stone villa with a roof terrace sits in the rocky hills of northern Corsica, a French island. The 2,152-square-foot home was constructed in 2008 on a lot of more than half an acre and has three bedrooms and three bathrooms. The property includes a swimming pool with a wooden deck, along with a 323-square-foot stone building used for storage that could be converted to a master suite, said Frédéric Olivieri, the listing agent with Sotheby’s International Realty.

The home — which was designed by Marc Held, a French architect, with his son Mathias, the homeowner — was inspired by vernacular Corsican architecture. Made of local stone, it has an austere look, with a sloped roof and small, traditional Corsican windows with interior shutters; inside, the ceilings are high, with painted wooden beams. All three airy bedrooms are off the ground-floor entrance, each with painted wood floors and its own en-suite bathroom. A wooden staircase ascends to the second floor, which has a large living room with a wood-burning fireplace and an open kitchen with an island and oak cabinets. A large roof terrace, reached by an exterior staircase, offers views of Monte Grosso. The villa is air-conditioned and has parking, but no garage.

The property is in Zilia, a village of about 300 with vineyards and a mineral spring. Landscaped with palm, citrus and olive trees, the villa is about 15 minutes from Algajola beach and less than half an hour from the coastal city of Calvi, which has about 5,400 residents and an international airport. Ajaccio, the capital of Corsica, has a population of more than 68,000 and is about three hours away.

Market Overview
Corsica, a Mediterranean island with about 330,000 residents, is known for its stunning beaches and is essentially divided into two housing markets, in the north and south, said Lionel Thomas, the founder and real estate director of the brokerage and advisory agency Mr. & Mrs. Thomas Private Office.

“The pricing is more expensive on the south side of the island, where there are more celebrities, and it’s more fashionable than the north,” Mr. Thomas said, whereas the northern side has “less construction, more historic buildings” and is “a bit more windy and colder in the winter.”

The price of waterfront properties in both areas has increased dramatically over the past decade, but the general housing market has faced challenges following events like the global financial crisis of 2008 and, more recently, Brexit and the French presidential election, brokers said.

“Corsica, and the whole of the French market, has been a tough one for the last few years,” said Alexandra Connolly, director of Alexandra Lloyd Properties, a real estate agency based in Nice that specializes in properties on the French coast and Corsica.

But while the housing market may be sluggish, prices significantly lower than those of comparable homes on the French Riviera may draw some buyers, agents said. “We recently sold a 300-square-meter waterfront home near Porto-Vecchio, with its own beach, for 5 million euros,” Mr. Olivieri said. “A similar offer on the Riviera would be hard to find and would at least cost double the price.”

Average prices in Corsica’s population centers are wide ranging, said Claudia Mura, a director with Barnes International Realty Corsica. In Bastia, in the north, the average is roughly 2,400 euros a square meter, or $265 a square foot, she noted, while in Lecci, to the south, the average is about 4,900 euros a square meter, or $542 a square foot. And waterfront properties in cities like Lecci, Bonifacio and Porto-Vecchio in the south can be more than 20,000 euros a square meter, or $2,211 a square foot, Ms. Mura said.

Who Buys in Corsica
The housing market is mostly fueled by French buyers, including many expatriates, brokers said. But the number of foreign buyers is growing, many of them from Belgium, Switzerland, Britain, Italy, Germany, the United States, Holland and the Scandinavian countries.

Buying Basics
There are no restrictions on foreign buyers in Corsica, which is an administrative region of France. As in mainland France, a notary typically conducts the sale and a lawyer is not necessary, brokers said.

Buyers pay about 7 percent of the sale price in fees, which include the notary fee and any government taxes, Ms. Connolly said.

Mortgages are available to foreign buyers, though depending on circumstances, they may have to put down 35 to 40 percent rather than the 25 percent required of local buyers, Mr. Thomas said.

Languages and Currency
French, Corsican; euro (1 euro = $1.19)

Taxes and Fees
The annual property taxes on this home are about 4,000 euros, or $4,760.

The New York Times