EconSource: Saudi Arabia Rules Out Production Cuts

Saudi Oil Minister Ali al-Naimi said Tuesday he was confident that more countries would join an agreement to freeze oil output at existing levels in talks expected in March. However, he effectively ruled out production cuts by major crude producers anytime soon. “A freeze is the beginning of a process. If we can get all the major producers to agree not to add additional barrels, then this high inventory we have now will probably decline in due time,” he said, but added that production cuts will not likely occur because he does not believe most producers would remain committed to decreasing their output. Iraqi Oil Minister Adel Abdul Mahdi said Tuesday that the success of a freeze depends on unified support among producers. “If some people freeze and others raise, then this is not a good policy,” he said. Head of Iraq’s State Oil Marketing Organisation (SOMO) Falah Alamri said that any change in the country’s output would have to be taken jointly with international oil companies. [Reuters, WSJ, NYT, 2/23/2016]

Kurdish oil flows shut as pipeline sabotaged in Turkey
Oil exports from the Kurdistan Regional Government (KRG) are set to be suspended for a second week running, a shipping source said, depriving the region of its main revenue stream. The pipeline to the Turkish port of Ceyhan from fields in northern Iraq, which carries around 600,000 barrels per day (bpd) of crude oil, has been halted since February 17 and is unlikely to resume pumping until February 29. The outage is one of the longest in the past two years. Industry sources have said the pipeline was sabotaged and that crude flows had been turned off due to ongoing security operations in Turkey’s Sirnak province. As a result of the outage, Iraq’s state-run North Oil Company (NOC) has been forced to cut production to around 120,000 bpd from 200,000 bpd. [Reuters, 2/23/2016]

EIB mobilizes EUR 250 million for Tunisia
The European Investment Bank (EIB) has announced EUR 250 million in financing aimed at modernizing Tunisia’s road infrastructure and strengthening support for entrepreneurs. EIB Vice President Roman Escolano said the funding is key for Tunisia’s economic development, social cohesion, and job creation efforts. EUR 150 million will be allocated to modernizing priority roads in greater Tunis, Sfax, and Nabeul. The EIB will also inject EUR 100 million into Tunisia’s economy to provide access to financing for Tunisian small and medium-sized enterprises (SMEs). Escolano also emphasized the EIB’s support for Tunisia’s banking sector. The funds brings total EIB financing for new projects in Tunisia to nearly EUR 1.5 billion since the 2011 revolution. [TAP, EIB (French), 2/23/2016]

Egypt’s value added tax to be set at 10 percent
Egypt’s value added tax (VAT) has been set by the government at a flat rate of 10 percent. The VAT will be applied to each member of the production chain of goods and services, instead of the current sales tax paid by customers. The VAT that the consumer pays when the product comes on the market applies to the cost of the product, minus the cost of the components that have already been taxed. The VAT will raise the price of goods by between 0.5 and 2.5 percent, according to a previous statement by the Finance Ministry. The VAT bill is currently under review by the parliament. [Ahram Online, 2/24/2016]

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