OMAN REACHES OUT TO ASIAN TRADE PARTNERS

UNCLAS MUSCAT 000624

SIPDIS

SIPDIS

STATE FOR NEA/ARP, EEB/CBA
COMMERCE FOR COBERG

E.O. 12958: N/A
TAGS: ECON EINV PREL MU
SUBJECT: OMAN REACHES OUT TO ASIAN TRADE PARTNERS


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Summary
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1. The Ministers of National Economy and Commerce & Industry
recently staged a four-nation Asian tour to strengthen Oman's
economic relationships with key energy importers. During the
trip to South Korea, Japan, China, and Vietnam, the ministers
concluded agreements for joint ventures in the production and
supply of liquefied natural gas (LNG),as well as presided
over the opening of an industrial joint venture with Chinese
partners. The visit represented the Omani government's keen
interest in increasing its investment exposure in Asia. End
summary.

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Energy-Focused Excursion
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2. On May 20, Ahmed bin Abdul Nabi Macki, Minister of
National Economy and Deputy Chairman of the Financial Affairs
and Energy Resources Council, and Maqbool bin Ali Sultan,
Minister of Commerce and Industry, embarked on an eleven-day
Asian trip to reaffirm the Sultanate's relationships with key
energy importers. In South Korea, Macki signed an agreement
with Korean export-import bank Kogas to establish storage
facilities for LNG in the Sultanate. In Japan, Macki, on
behalf of the government-owned Oman Shipping Company (OSC),
penned an agreement with the Japanese shipping firm Mitsui
OSK Lines to establish joint ownership of a new 110,000 ton
capacity LNG tanker. This agreement builds upon the existing
joint partnership between the two companies, as they already
own six LNG carriers, in addition to five more on order.

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Exploring Opportunities in China and Vietnam
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3. Both Macki and Maqbool traveled onward to China to
advance further joint investment projects. The two attended
the inauguration of an aromatics complex of the Qingdao
Lidong Chemicals Company, in which Oman Oil Company holds a
30 percent stake. In a statement to the Oman News Agency,
Macki reiterated the Sultanate's willingness to embrace
foreign investment and to diversify sources of national
income by investing in projects of this nature. The chemical
complex, according to Macki, represented a sound investment
for Oman, as the plant will provide the building blocks for
the production of plastics, textiles, and paints. In
addition, the ministers signed a partnership agreement to
establish a $40 million joint Omani-Chinese venture between
OSC and the China Gas Company. The venture's focus will be
to import crude oil and LNG from the Middle East, as will
also dabble in the areas of oil exploration, project
development, and transportation of energy.


4. In Vietnam, the final stop of the trip, Maqbool penned a
memorandum of understanding between Vietnam Oil and Gas
Company and Oman Oil Company to augment bilateral cooperation
in energy production and refining operations. The visit,
Macki's first to the country, aimed to explore investment and
cooperative opportunities in the region, and is a follow-up
to the signing of a commercial exchange agreed upon in 2004.

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Comment
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5. The lengthy trip by Oman's two primary ministers on
economic matters signifies the importance the Sultanate has
placed on enhancing its foreign investment portfolio in a
region that imports most of its energy products. The
Ambassador's June 2 meeting with Maqbool reinforced this
point as the Commerce Minister highlighted Oman's need to
seek out promising opportunities with its Asian trading
partners, including rising ones such as Vietnam.
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