It has been 60 years and more since OPEC (Organisation of Petroleum Exporting Countries) was founded in Baghdad. All through its turbulent history, the grouping has witnessed disagreements and efforts at one-upmanship between member countries. Often, these differences have led to the near collapse of the organisation.
But the interests of OPEC’s member-states and their awareness of the importance of some degree of agreement have ensured the world oil market retains a measure of balance and price stability. This has prompted them to reach compromises and contributed to transforming the organisation to an ‘OPEC+’ status after the closer associations with Russia and Kazakhstan.
The latest disagreement is similar to several previous ones – except for the taking it out of its context for certain purposes. We have followed OPEC meetings since we were university students in the 1970s and 1980s due to their importance for our countries and economic futures. There was never a permanent disagreement between two countries – the differences have always been between two groups that have divergent interests on certain matters.
Does the nature of the new disagreement differ from all the previous differences in the past 60 years? The answer to this question will raise questions through which many important conclusions can be drawn. We believe that it does not.
Nature of the spat
The first group, which includes Russia, Iraq and other countries, have called for extending the baseline of oil production and output cuts until the end of 2022, while the other group seeks to change the base ceiling. This group includes Kazakhstan and Mexico, although the latter have not announced their position openly.
So, why is some international media distorting the nature of the disagreement into a dispute between two countries? Some Arab media have been dragged to this juncture without analyzing the nature of previous differences.
Here, the danger lies in misleading public opinion to create an atmosphere of heightened tensions or to achieve other purposes. Especially since the current disagreement is not comparable to the deep differences within OPEC in past decades. Even then, it was able to overcome all such issues without disturbing the relationship between countries in the two opposing groups. This clearly means that the current disagreement can be overcome thanks to OPEC’s accumulated experiences, through compromises that satisfy all parties.
The OPEC spat will be resolved sooner. The common interests and friendly relations between the two groups will eventually impose themselves into shared solutions. Everyone is avoiding last year’s scenario when prices collapsed below $20 a barrel, and even reached a negative price of minus $40 a barrel in the futures market for the first time. However, the situation was quickly overcome. Last year’s experience was bitter, particularly because it coincided with a drop in oil demand by 30 million barrels per day due to the pandemic.
A common point
Going back to the origin of the disagreement between two groups, the fact is each has its own reasons and demands, but the interests that unite the countries in the two groups are undoubtedly greater than the disparities. This will facilitate an eventual compromise that preserves the gains of all member countries and leads to oil market stability, which is important to a world economy still caught in the overhang of the pandemic.
The writer is a specialist in energy and Gulf economic affairs.
Dubai: Emirates airline expects high passenger volumes to pass through Terminal 3 at Dubai International between July 16 to 17.
Traveller numbers are reaching their highest levels since the pandemic began, said the airline in a statement.
UAE has declared that the Eid Al Adha and Arafat day holidays for ministries and federal entities will be from July 19 to July 22. Plus with the weekend added on, airlines are hopeful that a sizeable number of UAE residents will be heading for their first proper summer break since 2019.
“With added safety measures and COVID-19 travel requirement checks in place, travellers may encounter longer than expected waiting times at Emirates check-in counters,” said Emirates.
Check in early
Emirates urged customers departing from Dubai to to physically check-in and drop their bags early to avoid long wait times. Customers can check-in for their flights up to 24 hours before departure, and those flying to the US can check in 12 hours before departure.
“Customers are also reminded to ensure they have all the relevant documents ready and review the latest travel requirements to their booked destination, including whether forms, vaccination certificates or negative PCR tests are required on the Emirates Travel Hub, which has the latest information for every country on the airline’s route network,” said Emirates.
Furthermore, all passengers are requested to check in no later than 3 hours prior to departure. Customers who present themselves less than 60 minutes prior to their scheduled flight departure will not be accepted for travel. Online Check-in is also available from 48 hours before departure and customers are reminded to visit the Emirates check-in counters or contactless kiosks to complete the required travel documentation checks and formalities.
Customers are also advised to make sure they get to their boarding gate on time. Gates open 90 minutes before departure, and close 20 minutes before departure.
Dubai: One of the oldest banks in the United Arab Emirates is preparing for a digital-only future as it fends off competition from non-traditional financial services startups.
Dubai-based Mashreqbank now operates just 10 branches in the UAE, down from 34 two years ago. That’s set to fall further, with Chief Executive Officer Ahmed Abdelaal predicting traditional branches will “cease to exist very soon.”
“There’s a complete shift in our strategy to focus on digital channels,” which now account for the majority of new business at the lender, Abdelaal said in an interview. “We still have some clients who rely on brick and mortar but our numbers show these are diminishing by the minute.”
Mashreq traces its origins back to 1967, four years before the UAE was founded as an independent country. The lender, like others in the Middle East, is pivoting to digital banking to cater to a young population that prefers to bank online. For some countries like Egypt, digital platforms are often the only way to access banking services.
Digital is the way forward
While lenders including Emirates NBD have set up digital offshoots, independent entities are also entering the market. The founder of Dubai-based Emaar Properties PJSC has set up a platform called Zand, while Abu Dhabi sovereign fund ADQ last year announced plans for a $545 million digital bank. Meanwhile, local payment apps have attracted funding and companies like Stripe Inc. have entered the market.
Abdelaal said Mashreq isn’t competing with traditional banks anymore. “Our real competitors are the providers of client experience…the owners of data, the owners of information,” he said.
Energy transition is one of the great challenges of mankind. On the one hand, it is necessary to meet the constantly increasing demand for energy – around 780 million people still have no access to reliable electricity, a basic prerequisite for economic development and stability.
On the other hand, climate change is forcing us to be more sustainable. The goals of the Paris Agreement are not an option, but a necessity. However, society will only go along with the process of change if a balance is achieved between sustainability, availability and affordability of energy. With ‘Fit for 55’, the EU Commission is presenting its first legislative package aimed at achieving the new climate target of 55 per cent. This is an important step. But declarations of intention alone are not enough – what we need above all is speed.
Word from Brussels so far has been that the Commission wants to increase the share of energy from renewable sources to 38-40 per cent by 2030. That is the right thing to do. But more important than individual percentage points is that the implementation of projects and, above all, the approval procedures are accelerated.
In Germany, for example, it takes up to 12 years to build a power transmission line. That’s far too long; no energy turnaround will succeed that way. We should have the courage to question existing regulations to see to what extent they still make sense for achieving the goals.
Expanding the European emissions trading system to include the transport sector is the right thing to do, but it is not enough. A significant increase in climate-neutral fuels would require a CO2 price of over 200 euros.
This cannot be achieved overnight. An e-fuels quota for the transport sector would help. And, adapting the ‘Energy Taxation Directive’ would also be an important contribution. Countries can increase taxes for CO2-intensive fuels and reduce them for low-CO2 fuels.
For almost 20 years, the EU member-states have failed to reach a joint agreement on modernizing the directive. If not now, when?
No technological taboos
On the road to a climate-neutral world, there should be technological openness. The objective is to reduce CO2 emissions as quickly as possible. For this reason, there are applications where interim solutions – eg., based on natural gas – make sense if they make it possible to replace more CO2-intensive energy sources such as coal in the short-term.
Discussions about the colors of hydrogen, for example, do not get us anywhere. Rapid implementation of projects on an industrial scale, also with the aim of establishing supply chains for new technologies, is the right approach if Europe is to keep pace with international competition.
Making state aid law more efficient
Technically, many things are possible. However, change will only occur at a sufficiently high speed if sustainable approaches are also economically attractive through corresponding business models. Research funding is therefore essential to promote Europe as an energy and industrial location.
The EU is responding to this with its Fit for 55 package, as are national governments. In Germany, the decision to promote hydrogen as an important project of common European interest is the right one. The German government is making nine billion euros available for this purpose, which is very good.
So far, however, barely 1 per cent of this has been utilized, which is not enough. State aid law must be sensibly adapted – it must not become an obstacle to industrial production.
Instead of polarizing, we must work together to find solutions. This includes more honesty in the debate. The transformation of our societies has far-reaching consequences not only for business, but for all people.
Everyone needs to remember that transformation does not come free of charge and can sometimes be painful. That’s why we need to find ways to share the costs fairly. We should start today.
Dubai: The National Bank of Fujairah and the Arab Petroleum Investments Corp. (APICORP) have extended $34 million to the French energy giant TotalEnergies to develop a 50MW renewable energy portfolio in Dubai.
TotalEnergies is supporting 30 industrial and commercial (I&C) customers in Dubai through turnkey solutions that reduce the overall energy bill and carbon footprint. This way, up to 95 per cent of clients’ needs will be covered by renewable energy. This is TotalEnergies’ first distributed generation project financing in the UAE.
The solar portfolio will represent an annual production of 83 GWh and 36,600 tons of CO2 emissions avoided per year. TotalEnergies is targetting a solar portfolio of 250 MW in the Middle East under development for I&C customers in the next five years, including 100 MW already in operation or awarded.
“Currently comprising around 13 per cent of our total debt portfolio alongside direct equity investments in pioneering companies, projects, and technologies in several Arab countries, the share of our investments in the sector has been steadily gathering pace, and we expect this support to continue in 2021 and beyond,” said Dr. Ahmed Ali Attiga, CEO of APICORP.
“Our partnership with TotalEnergies and the National Bank of Fujairah underscores APICORP’s belief in green energy as the key to the sustainability of the MENA region’s energy future and supporting the ambitious energy visions of our respective member states – including the UAE.”
Dubai: With UAE residents packing up for their Eid getaway breaks, local airlines and airports are gearing up for one of the busiest periods on the calendar. Destinations such as Mykonos and Santorini in Greece and Malaga in Spain beckon, and more are opening up by the week as travel restrictions ease.
Amidst all that hectic activity, Etihad Airways has issued a traveler alert to see through the hectic season. Here are a few pointers:
Check the destination requirements
With travel restrictions changing frequently, Etihad recommends its fliers to visit etihad.com/destinationguide to check for latest updates before the journey begins.
Verified to Fly?
Visit ‘Manage my booking’ on the Etihad portal to share COVID-19-related travel documents. Approval will be shared by email giving passengers confidence that all required documents are in place, and allowing fast-track airport check-in at the ‘Verified to Fly’ desks.
Check-in online and arrive early
During peak times, Economy Class check-in for non-US flights opens four hours before departure and closes one hour before departure. Business and First class check-in closes 45 minutes before departure. For US flights check-in closes two hours before the flight.
When travelling to the US
Benefit from the US Customs and Border Protection facility (USCBP), meaning all immigration and customs formalities will be completed in Abu Dhabi before departing. Guests must present themselves at the USCBP facility no later than 90 minutes before departure.
Check the baggage allowance
The cabin baggage policy is 7-kilogram for Economy class and 12kg for First and Business class guests. Maximum cabin baggage dimensions are: height 50-cm, depth 25-cm and width 40-cm. Alternatively, pre-purchase additional hold baggage at special rates before departure on Etihad website or through the app.
Business Class Lounge is available for guests wishing to enjoy Etihad’s premium hospitality before boarding. Guests travelling in Economy may purchase access at the Etihad Lounge. Entrance is complimentary to guests travelling in premium cabins.
Check the flight timing and departure terminal
Given the significant increase in passenger numbers, Etihad Airways will relocate check-in for Economy class guests on the following flights to Terminal 1:
EY533 to Beirut (BEY) on 14, 15, 16 and 17 July
EY653 to Cairo (CAI) on 14, 15, 16 and 17 July
EY037 to Paris (CDG) on 14, 15, 16 and 17 July
EY73 to Zurich (ZRH) on 14, 16 and 17 July
This to-do list should be handy for all Etihad travelers. Fliers on other airlines can do their tasking to set themselves up for the holidays.
Dubai: Emirates Global Aluminium has commissioned the second phase of its expansion at the Al Taweelah smelter in Abu Dhabi, boosting production by more than 30,000 tonnes of hot metal a year. The work was done ahead of schedule at what is the UAE’s biggest industrial company.
The expansion adds 26 ‘reduction cells’ to Potline 2, which will raise the production output. EGA is adding further reduction cells to each of the three potlines at Al Taweelah, with the expansion to Potline 1 having started production in April. The expansion to Potline 3 is expected to start production later this year.
The full expansion of 66 new reduction cells will increase EGA’s production capacity by some 78,000 tonnes of hot metal per year. The work is running “ahead of schedule”, with the full project at 80 per cent completion.
EGA’s aluminium is the biggest UAE export after oil and gas, last year selling around 2.52 million tonnes of cast metal. It also supplies all the UAE’s primary aluminium needs, with sales supporting a domestic aluminium sector that “produces everything from car parts to electricity transmission cables”. The aluminium sector as a whole is one of the UAE’s largest industries, accounting for 1.4 per cent of the economy and supporting 60,000 jobs.
Dubai: Fares on routes from Dubai to all major Pakistani cities have skyrocketed as expats rush back home for the long Eid break.
The UAE has declared that the Eid Al Adha and Arafat day holidays for ministries and federal entities will be from July 19 to July 22. This translates into a six-day long break and passengers seem to be counting on the fact that return flights from Pakistan to Dubai will become available on July 21 – a date confirmed by Emirates and Etihad.
A flight to Karachi, Pakistan’s most populous city, can set passengers back by Dh4,000 to Dh6,000. Lahore comes in cheaper at around Dh1,300, while Islamabad can cost anywhere between Dh800 to Dh1,500.
The surge in ticket prices could also be attributed to restrictions on foreign airlines operating to Pakistan. PCAA (Pakistan Civil Aviation Authority) has curtailed inbound international flight operations to 20 per cent of the actual summer 2021 schedule up to July 15.
Schedules on booking websites show that Emirates, flydubai, and Abu Dhabi’s Etihad Airways are only operating flights to Karachi at the moment. Pakistan International Airlines (PIA) seems to be connecting Dubai and Abu Dhabi to all other major cities.
A potential move by Pakistan to restrict anyone from entering the country without a COVID-19 vaccination certification could be a double whammy for airlines operating the route.
The National Command Operation Center, which oversees the country’s pandemic response, recommended that anyone who does not hold a COVID-19 vaccination certificate should not be allowed to travel by air after August 1.
However, some experts believe it will not have a huge impact on travel demand.
“Travel demand will remain high because it is a free of cost thing and widely available in Pakistan, considering the vaccination programme being introduced by the state,” said Fahad Masood, a Pakistan-based aviation analyst.
Any hopes of a revival in travel will include the resumption of flights from Pakistan to Dubai, which are at the moment suspended amidst a spike in ‘Delta’ variant cases.
“The Pakistani labor class in UAE is willing to travel to Pakistan and back and they constitute a major chunk of the passengers,” said Masood. “It will resume sooner than later”
Dubai: Kuwait’s retail giant Alshaya Group has retained its regional rights to the UK’s Debenhams brand, with the latter now under a new management.
The partnership with Debenhams’ new owner – boohoo group, which made its name in online fashion retail – comes with value additions too.. For the first time, regional shoppers will have access to boohoo’s own portfolio – boohooMAN, Nasty Gal and MissPap fashion brands in store.
They will also get back Burton, Coast, Dorothy Perkins, Karen Millen, Oasis, Wallis and Warehouse – “brands that have all been progressively acquired and refreshed by boohoo group in recent years”. Alshaya Group will “progressively introduce” boohoo fashion brands into Debenhams Middle East stores from October. The launch of Debenhams.com in the region is planned for early 2022.
Debenhams is a highly successful and well-loved brand in the Middle East, thanks to sustained store and product innovation over 25 years. Today we are delighted to step-change that innovation through our new partnership with boohoo group plc, one of the UK’s leading digital retailers
– John Hadden, CEO of Alshaya Group
A casualty and then the pick up
Debenhams had been one of the notable casualties of the COVID-19 created high-street disruption of last year, and had been a bitter blow for the UK’s retail scene.
Now, under boohoo group, which picked up ownership in January last, the legacy brand is looking to script a major revival. And Alshaya will remain part of that process – the first Debenhams store opened in the Gulf in 1997, at a location in Bahrain. It soon extended to other Gulf markets, where the name remains extremely popular with a family-shopper audience.
Alshaya operates 23 Debenhams in-mall stores in Kuwait, Saudi Arabia, the UAE, Bahrain, Egypt, Oman and Qatar. “Debenhams has been an incredibly popular brand in the region for over 25 years – so this is a great opportunity to build on the existing brand awareness, introducing exciting new brands and extended product ranges to customers,” said John Lyttle, CEO of boohoo group. “Alshaya has a great understanding of retailing in the region, are well placed to successfully drive the growth and popularity of Debenhams in the Middle East, and can leverage boohoo’s digital pure play expertise.”
Dubai: The year — 1919. The Middle East was recovering from the First World War, when the erstwhile Ottoman Empire was being divided among the British and French, as they sought to expand their own.
As post-war reconstruction took hold, Rao Sahib Jashanmal Jhangiani, with his brother and a few friends, sailed from India to land in Basra, Iraq, to take advantage of the opportunities that such activities would create. In this way, a 102-year journey began , with Rao Sahib selling goods and services to the British who were coming into Iraq. “He sensed the opportunity to sell these goods and services to the people who were used to a different mode of life,” says Tony Jashanmal, Rao Sahib’s grandson and the current President of the Jashanmal Group. As a result, the Jashanmal store, selling imported lifestyle products, became a success.
Following the oil discoveries
As the world progressed into the late 1920s and early 1930s, the requirement for oil suddenly exploded. As oil had already been exploited to a great extent in Iraq, the British were hunting in the region for new oil sources. It was first discovered in Kuwait, just a two-hour drive from Basra. This discovery necessitated the rapid development of Kuwait, which was a complete desert in contrast to the developed cities of Iraq.
While in Basra, Rao Sahib struck up a close friendship with Colonel Dickson, who was later to become the British Political Agent in Kuwait. He convinced Rao Sahib to open a branch in Kuwait, to cater to the needs of the officials of the oil companies and their families. This friendship led to Jashanmal opening his first store in Kuwait in 1933, which was handled by Rao Sahib’s eldest son Naraindas Jashanmal, who had just joined the family business.
The rest, as they say, is history.
As area after area in the region struck the black gold and multinational oil companies moved in, the goodwill that Jashanmal had created in his early years allowed him to follow the oil trail, setting up store after store in each of the cities that were the centres of the oil commerce.
From that single store on the Iraqi coastal city, today, the Jashanmal Group strides across the region with a multitude of stores, in addition to an extensive distribution and wholesale network to over 1,000 retailers across the GCC and India.
Following the development in the region, the Jashanmals’ journey entered Dubai in 1955. The Ruler of Dubai, Sheikh Rashid bin Saeed Al Maktoum, was in Bahrain when he visited the Jashanmal store. Impressed by what he saw, he asked Hiro Jashanmal, Rao Sahib’s son, to open a store in Dubai. The same year, Gulf Aviation, a subsidiary of the British Overseas Airways Corp (the predecessor to British Airways), began direct flights between Sharjah and Bahrain.
When Sheikh Rashid asked Jashanmal about which part of Dubai he would like to set up his business, he pointed out to a place in Deira. When asked to explain the reasons behind this decision, since most of the city’s action was in Bur Dubai, he said that since the airport was on the other side of the creek, Deira would be the area where all the new people coming in by air for the development of the city would settle down. This was all the more important since there was no bridge to carry the heavy equipment across the creek.
The first Jashanmal store came up in Deira in 1956. Such was the pioneering move that the area around the store was unofficially called Jashanaml Square. It was later renamed as Al Nasr Square, and still stands today. “There was no electricity those days, so we all used generators. We built the stores first, and the house was always on top of the store. The warehouse was behind the store,” Tony Jashanmal said.
Hiro Jashanmal’s predictions came true as Deira developed very fast afterwards. McDermott took up space at what is today the Dubai Creek Golf Club to build their rigs, along with the Oilfield Supply Company. The two principal roads in Deira — Al Maktoum Street and Bani Yas Street — led to Al Nasr Square, where the Jashanmal store was located.
As the store tasted rapid success, the company soon launched its expansion plans. The store in Abu Dhabi opened in 1963.
Jashanmal’s speciality was dealing with British goods due to links with the oil companies. “We became a one-stop-shop for all things British — literally, from foodstuff to diamonds,” said Tony Jashanmal. Since the oil companies were British, their staff were mostly British, which was followed by the telephone companies and others.
As the economies of the region opened up, smaller towns also started witnessing a rise in demand for the kind of products Jashanmal was selling. “But since the shops in the smaller towns did not have the wherewithal to import these products themselves, they started buying from us. Our distribution business was thus launched,” Jashanmal said. Today, the distribution business has overtaken the retail business, with its network having spread to more than 1,000 points of sale across the UAE, Oman, Bahrain & Kuwait, with 80,000 square metres of warehousing facilities.
Changes in ownership pattern
Running the family business becomes a challenge once the third generation comes into the scene, Jashanmal says. “Till the second generation, you are brothers and sisters. So the bonding is close. But in the third generation, you become cousins. You move far away, more so in our family as the opening of different stories meant the brothers were living far from each other, so the children were growing up in different places,” he says.
Till that point, the Jashnamals followed the traditional patriarchal system to run the family business. As Tony Jashanmal himself entered the business in 1973 after his father’s death, the need for a new approach was felt as the third generation was now in the fray. The family got together for two days at their home in Bahrain to thrash out the way forward. “We decided that we would go for a family shareholding pattern,” Jashanmal said, with each family member holding a specific amount. There is a limit on how much profit can be set aside as dividend, so that the business has enough capital for future growth.
It was also decided that no one from the family will hold the CEO or deputy CEO’s position. That would be filled in by professionals. Joining the family business remains entirely voluntary. “If any member of the family wants to enter the business, he will start at the bottom — at the warehouse,” Jashanmal said. Family members typically worked eight to 10 years in the company, before they find their own calling.
To take the company forward into the next 50 years, the Jashanmal Group decided about three years ago on a new strategy as digitalisation was increasingly taking hold. Once the plan was finalised, the company chose a new CEO — Khaled Soliman — to head its operations and lead the digital drive.
The transformation of the company structure to manage the digital drive was completed in February last year. “This was just before the COVID-19 pandemic, so it worked well for us,” Jashanmal said. The success of the strategy is borne in the fact that within just a year, e-commerce has contributed 4 per cent of the company’s turnover.
The shareholding structure has not changed, only the way of the running of the company, Jashanmal said. “This will drive us into the future. The system of the family sitting down and taking decisions collectively has worked well,” he added.
So how does a company thrive for over a century? The key to this is the adherence to a strong set of values, which hold on over the generations, Jashanmal said. “You can’t change the DNA too much for it to actually function this way. My grandfather had very strong principles and he always wanted that we keep to them. But you have to keep ahead of the times in order to stay relevant. You have to foresee what is coming.”
So what would these principles be? The main is the pricing. “You always charge fair value of a product. You have to make a profit to improve the business and be of better service to the community. But you do no charge them too much,” Jashanmal said. “Never think of yourself as a business, but think of yourself as a part of the community, where you have to do your bit.”
In terms of contribution to society, two things were in focus for the company — education and sport. Several family members were founders of prominent schools in the region, and have been active sportspeople and sports administrators over the years. “I learnt so much from my grandfather, and the younger ones learnt it from their parents, and the values carry on,” Jashanmal said.