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Gold9472
08-21-2005, 03:03 PM
9/11 factors boost Gulf economies

http://edition.cnn.com/2005/BUSINESS/08/21/gulf.911.ap/

Sunday, August 21, 2005 Posted: 1601 GMT (0001 HKT)

DUBAI, United Arab Emirates (AP) -- In the United States, the September 11 attacks are seen as the catalyst for a period of fear, war and economic worry.

But in the oil-rich Arab countries of the Gulf, September 11 is increasingly being seen as the event that kicked off a galloping economic boom -- and prodded investors to pull their money out of a United States perceived as hostile to Arabs, and instead invest it at home.

Since late 2001, economies in the six Gulf Cooperation Council countries have soared, with stock markets up a collective 400 percent. During the same period, investments from those countries into the U.S. slowed to a trickle.

In Saudi Arabia, birthplace of 15 of the 19 terrorists involved in the September 11 attacks, gross domestic product rose 37 percent between 2001 and last year. In the Emirates, home to two of the terrorists, GDP jumped almost 50 percent.

"It's just been an exceptional period, the likes of which the region hasn't seen in 20 years," said Simon Williams, a Middle East economist with the Economist Intelligence Unit in London.

By contrast, the U.S. economy rose 16 percent during the same period.

Most of the credit for the wealth influx here is due to the tripling of oil prices since 2001 to current levels of over US$60 (euro50) a barrel. Mideast gains outside the oil-rich Gulf -- in countries like Egypt -- have been much smaller.

But investors and economists also credit a shift in strategy that led Gulf Arabs to pull their money out of slumping U.S. markets and invest it at home.

Before 9/11, World Bank figures show Middle Eastern oil exporters were plowing as much as US$25 billion (euro20 billion) year into U.S. investments. For the three years of 2001-2003, the figure only reached US$1.2 billion (euro0.98 billion).

"We found an alternative asset class in our own backyard that is performing substantially better," said Walid Shihabie, head of research at Dubai-based Shuaa Capital.

Analysts here say Gulf investors were reacting to what they perceived as anti-Arab hostility in the United States, as well as fears their assets would be seized by U.S. courts probing capital flows for terrorist links.

"Capital is a coward," Shihabie said. "There was more risk after 9/11. People were worried about their assets being frozen because they were from the Gulf."

Shihabie and others cited anger at U.S.-led wars and Middle East policy as another reason for the exodus.

"The Americans shot themselves in the foot by being so harsh," said Beshr Bakheet, owner of Bakheet Financial Advisers in Riyadh. "Do you want to put your money in a country that is involved in wars all over the globe? Not only Saudis, but a lot of people aren't comfortable with this."

Investments pulled out of America were redirected into stocks and real estate in the Gulf and the wider Middle East, laying the ground for a boom that accelerated as the price of oil shot skyward, a process the World Bank describes as a "virtuous cycle."

There also more fundamental reasons Arab investors fled America, said Daniel Hanna, chief economist at Standard Chartered Bank in Dubai.

Many lost money in the bursting of the dot-com bubble. Others lost faith in U.S. regulators after accounting scandals at Enron, WorldCom and elsewhere, Hanna said.

By 2004, as U.S. markets recovered, it became clear that asset seizures weren't a problem. World Bank figures show Arab investment in America returned to previous levels -- which doesn't reflect the huge increases in revenue from the oil boom.

Shihabie said anger at American policy in the Middle East continues to limit Arab investments that, during previous oil booms, flowed liberally into U.S. stocks and government bonds.

Gulf oil revenues are expected to reach almost US$300 billion (euro245 billion) this year, up from just US$61 billion(euro50 billion) in 1998. But much of the cash is staying in the region.

Oil money is bankrolling more than US$120 billion (euro98 billion) in construction in the Gulf this year, according to the Washington-based Institute of International Finance.

Building cranes line the horizon in the Emirates, Qatar and Bahrain. New highways are slicing across the desert, and hives of imported laborers are erecting hospitals, universities and entire districts of high-rise apartment blocks -- even artificial islands covered in luxury villas.

The aftermath of September 11 has seen other changes in relations between Arabs and the United States.

The World Bank study shows that few Gulf Arabs are vacationing in America anymore. Instead, Middle East destinations like Cairo, Beirut and Damascus have returned to favor.

Gulf Arabs are also less likely to send their children to American universities -- at least to their U.S. campuses.

The preference for American-style education remains strong, and several U.S. universities are in the midst of opening satellite campuses in Dubai and Qatar.

Copyright 2005 The Associated Press. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed.

Gold9472
08-21-2005, 03:18 PM
The Middle East
ExxonMobil has a substantial production base and significant growth potential in the resource-rich Middle East region.

http://www.exxonmobileurope.com/Corporate/About/OurActivities/NEW_Corp_OA_Up_MidEast.asp

http://www.exxonmobileurope.com/Images/Corporate/365_Mideast.gif

8/21/2005

Qatar
ExxonMobil is making significant progress working with Qatar Petroleum and other joint-venture partners to further develop the giant North Field, the largest non-associated gas field in the world.

Gross resources to be developed through existing and planned LNG trains and pipeline projects exceed 22 billion barrels of oil-equivalent. Gas resources from the North Field are well positioned and competitive for supplying Liquefied Natural Gas (LNG) to all markets in the Asia-Pacific region, Europe, and the United States.

United Arab Emirates
ExxonMobil had net production of 110 thousand barrels of oil per day in Abu Dhabi during 2003, which was associated with the highest annual gross production rate since first oil exports from the onshore concession began 40 years ago. The company has a 9.5 percent interest in the concession operated by the Abu Dhabi Company for Onshore Oil Operations (ADCO). During 2003, ADCO awarded major engineering, procurement, and construction contracts for field development projects to increase sustainable production capacity by more than 15 percent to 1.4 million barrels per day (gross).

ExxonMobil is pursuing other investment opportunities in Abu Dhabi, focusing on areas where ExxonMobil’s industry-leading technology and capabilities can contribute to increased recovery of oil and gas, and enhanced training and development for UAE nationals.

Yemen
ExxonMobil holds interests of 37 and 15 percent, respectively, in Yemen’s Marib and Jannah Production Sharing Agreements. Total net oil production was 22 thousand barrels per day in 2003.

Kuwait
ExxonMobil has formed and leads a consortium (ExxonMobil interest, 37.5 percent) to compete for Kuwait’s tendering of an Operating Services Agreement covering four fields in the northern part of the country. The consortium has submitted development plans for consideration by Kuwait Oil Company.

Gold9472
08-21-2005, 03:19 PM
I posted the ExxonMobile story for those who think only the Arabs benefitted from 9/11.

Gold9472
08-21-2005, 03:25 PM
Chevron is also HEAVILY vested in the Middle East.