G S N G u lf S tates News CbI Published fortnightly since 1974 Volume 38 • Issue 977 • 18 September 2014 IOCs return to Kurdistan as prospect of exports outweighs heightened risk US air strikes and reinvigorated Peshmerga forces have stalled the Islamic State advance, allowing oil companies to return to promising KRG oil fields. But despite this development, it will be tough going for IOCs – and the KRG economy – in a region where the balance of risk and reward has shifted nternational oil companies (IOCs) and the Kurdistan One worrying aspect of the KRG’s response to ISIL’s advance Regional Government (KRG) have been eager to send was the failure of Peshmerga forces to stand firm. This led out a strong ‘business as usual’ message, as the immediate critics to question whether a decade of peace and crony Ithreat posed by Islamic State (ISIL) to territory under the appointments had undermined the Kurdish forces’ mettle. KRG’s authority has receded. ISIL’s withdrawal from some With US air support and the supply of western arms key areas has allowed a significant number of IOCs and providing an implicit security guarantee, they remain one of the few on-the-ground military forces potentially capable of service companies to resume operations. effective anti-ISIL operations. Following its unilateral Even so, stakeholders in Kurdistan’s emerging oil industry and annexation of Kirkuk, the KRG now maintains a 650-mile wider economy cannot disguise the fact that the risk-reward border with ISIL and is, for the time being, geographically balance may have permanently shifted. Even with ISIL in virtually cut off from the rest of Iraq. apparent retreat from US bombing and invigorated (and re- The combined US airstrikes and Peshmerga ground equipped) Peshmerga forces, Kurdistan is likely to be a much operations have driven ISIL forces out of some areas within less comfortable place to operate in, even while its greater the disputed territories, and clashes continue. ISIL has lost autonomy may eventually provide the conditions for profitable oil exports. Continued on page 13 Kuwait concerns Saudi solar Tamim’s efficiency drive reaches top of QP Barely two years ago, Emir Not for the first time is solar The appointment of Saad Al- minister and QP head roles. Sheikh Sabah Al-Ahmed Al- energy being mooted as a Kaabi as Qatar Petroleum (QP) GSN heard stories of energy Sabah was warning against solution to the kingdom’s managing director may prove a minister Mohammed Al-Sada energy problems, with significant step in helping Qatar being bogged down in QP’s “chaotic sedition” as citizens to confront serious challenges in contractors looking at a major day-to-day management, such as took to the streets in massive its energy sector, which range signing off on senior staff travel. anti-government protests. But new business stream and from declining crude output, The move is in line with Emir the opposition movement, has conference organisers lining disappointments over deep gas up to hold events across the (pre-Khuff) exploration, and Sheikh Tamim Bin Hamad Al- lost momentum, despite Gulf and in Europe that delays in the Barzan offshore gas Thani’s drive for greater attempts to reinvigorate it highlight the commitment of development to increasing efficiency and discipline in through new manifestos and a state-managed entities, which Saudi and other Gulf competition in the global gas he has spoken about several focus on corruption. Many administrations to renewable market. Al-Kaabi is expected to ordinary Kuwaitis now seem tackle inefficiencies across the times since coming to power 15 energy solutions. GSN ’s months ago. The introduction to more concerned about the sector, in part a legacy of the former sister publication, Saudi more freewheeling way of the QP board of two of his economy, with some progress Arabia Newsletter , discussed such doing things that once suited senior ministers with a on new projects providing a potential almost 35 years ago, the ambitious emirate. reputation for managerial boon to the government and in 1979, and we examine Al-Kaabi’s appointment discipline also fits into this being welcomed by investors. current ambitions in this issue. confirms the long-expected effort. separation of the energy For more, see page 11 —S EE PAGE 3 —S EE PAGE 9 ISSN 1463-1849 www.gsn-online.com Contents POLITICS IRAQI KURDISTAN: IOCs return and hope for exports 1 QATAR: Efficiency drive reaches top of QP 1 KUWAIT: Opposition subdued 3 G S N KUWAIT: Musallam Al-Barrak, videotape scandal 4 REGION: Governments seek response to drugs trade 5 Gulf States News IRAN: Khamenei defies the rumour mill 7 Volume 38 • Issue 977 • 18 September 2014 SAUDI ARABIA: Plans to reopen Baghdad embassy 7 Published fortnightly since 1974 OMAN: UN rapporteur criticises human rights 7 ROYALS WATCH Editor Fiona O’Brien QATAR: Sheikh Khalid Bin Thani’s travels 8 fi[email protected] SAUDI ARABIA: King Abdullah meets King Hamad 8 Contributors SAUDI ARABIA: Junior princes, Faisal Bin Mishaal 8 John Hamilton, Gazwan Aldafai, James Gavin UAE: MBR receives Libyan delegation 8 Cartographer ENERGY AND INDUSTRY David Burles SAUDI ARABIA: Solar energy on the agenda again 9 Production SAUDI ARABIA: Civil nuclear ambitions 10 Shirley Giles QATAR: Al-Kaabi appointed QP head 11 Sales and Service BAHRAIN: Bapco FEED contract for Technip 11 Direct: +44 (0) 1424 721 667 IRAQI KURDISTAN: IOCs return (continued) 13 Fax: +44 (0) 1424 721 721 Email: [email protected] DEFENCE AND SECURITY Director UAE: Australia sends military aircraft and personnel 13 Nick Carn [email protected] UAE: MBZ meets French defence minister 13 Manager FINANCE Tara Mulvey QATAR: QNB takes African stake 14 [email protected] SAUDI ARABIA: Local debt market prospects 14 Single subscriptions of Gulf States News (GSN) are available in NEWS IN BRIEF: Bahrain, Qatar 14 Internet format – including online and emailed content. Multi-user NEWS IN BRIEF: Coface, Ithmar Capital 14 and academic rates are available. COURTS: Saudi-Swiss bank case 15 www.gsn-online.com DIARY EVENTS: What’s on around the region 15 RISK MANAGEMENT REPORTS SAUDI ARABIA: C2 – Support for US against ISIL 16 QATAR: A ò1 – Attempts to resolve GCC spat 17 GSN VIEW 2014 Cross-border Information. All rights reserved. IRAN: Crunch time looms for nuclear deal 18 Data and information published in Gulf States News is provided to Cross-border Information (CbI) by its staff and network of correspondents through extensive surveys of sources and published with the intention of being accurate. CbI cannot insure against or be held responsible for inaccuracies and assumes no liability for any loss whatsoever arising from use of such data. No portion of this publication may be photocopied, reproduced, retransmitted, put into a computer system or otherwise redistributed without prior authorisation from Cross-border Information. Registered office: 4 Bank Buildings, Station Road, Hastings, East Sussex TN34 1NG, United Kingdom. Directors: JJ Marks, JM Ford, NJ Carn, JD Hamilton, E Gillespie 2 GULF STATES NEWS • VOLUME 38 • ISSUE 977 • 18 SEPTEMBER 2014 Politics Government crackdown and public disillusionment subdue Kuwait opposition Kuwait’s once-vibrant opposition movement is struggling to regain the momentum of recent years, when tens of thousands of citizens took to the streets to call for greater democracy and an end to corruption uwait has traditionally had the most active opposition boycott. Hashd’s leaders are Popular Action Bloc veterans, movement in the Gulf, and barely two years ago was including former assembly speaker Ahmed Al-Saadoun. In the Kthe scene of massive anti-government protests, leading past few months, Hashd has described itself as the head of a spear Emir Sheikh Sabah Al-Ahmed Al-Sabah to warn against confronting corruption and has publicly focused on bribery “chaotic sedition” and anounce he was changing the electoral scandals. In August, Hashd spokesman Saad Al-Ajami, a former law ( GSN 934/1 ). There were also reports that Saudi officials journalist, reportedly had his citizenship revoked. considered sending in Peninsula Shield forces to help “maintain stability”. But a loss of momentum, many Kuwaitis’ Increasingly big stick disillusionment with the opposition and greater government In the first show of opposition strength in nearly a year, Al- control over public discourse has led to a much quieter Barrak led a rally outside parliament in June, and there were opposition movement in recent months, despite attempts to smaller demonstrations in July following his arrest for accusing reinvigorate it through radical manifestos and a focus on senior figures of corruption ( GSN 974/4 ). According to corruption scandals. Alanoud Alsharekh, a visiting scholar at London’s School of The opposition boycotted the December 2012 elections and Oriental and African Studies, as protests have become more bad- there were ongoing demonstrations in the first half of 2013 tempered and the police have used tear gas and stun grenades, (GSN 940/5 ) but, while the fervour remained, there were fewer opposition leaders have increasingly come under fire for ways to express it – parliament was dissolved in June 2013, and “inciting anarchy”. there was a crackdown on Twitter users expressing anti- A growing number of young men have been arrested for being government sentiments. Despite a stirring speech by veteran involved in protests or for posting sympathetic content on social oppositionist and former MP Musallam Al-Barrak ( see profile , media, and the government has stepped up its use of page 4, and GSN 972/9 ) and anger in some quarters at the one- denaturalisation, a historical practice across the Gulf ( GSN vote decree, the opposition boycott of the 27 July elections was 976/3 ). Perhaps the most high-profile case so far is that of half-hearted (seven months earlier, a variety of Islamists, liberals Ahmed Al-Jabr Al-Shammari, chairman of opposition TV and some of the country’s largest tribes had shunned the poll), channel Al-Youm, who, along with several others, lost his and a more pro-government and active parliament was elected.