New visa laws causing a stir - impact will be chaotic

While corruption may be making the news overseas, here in Oman amongst the chattering expat class the scuttlebutt is all about those new visa laws.

Blogger of all things social in the english speaking community, Muscat Mutterings great summary of the new laws and their application in practice here.


Essentially,  while the law is made to look reasonable, the Ministry of Manpower have ensured no-one will be given a no objection certificate, the magic NOC, as required by the law to change jobs to a new employer.

So, if you want to change jobs, you can't even if you've been working for years, because your employer will refuse an NOC. To change jobs you have to leave the country for 2 years.

Ostensibly this is an attempt to bolster Omanisation. By forcing expats to leave through withdrawing visas from employers, the theory is that employers will replace them with Omani new hires. Yeah right.

I wonder what will really happen? Employers will retain expats even more than usual, because they know they won't get a visa to replace them. Salaries for expats will rise,  as their scarce resource means fewer of them. Plus, employers who do loose visas will fail to find qualified Omanis, will either reduce business, or find ways around the system, by employing on the black market and bribing officials to issue visas or to look the other way when the inspectors visit. The big oligarchs will as usual be exempted, by being in roles we all accept cannot be omanised, like construction ,or can afford enough sleeping Omani employees to meet the % required.

As usual with these sort of top down, outcome specifying laws, they will fail and only create unintended consequences. Well done Ministry of Manpower!

In other news, it was nice to see His Majesty greeting a visitor from Europe at the palace. I was getting concerned that he was out of the country. He has been busy getting things in order for the corruption trials:
- prisons up to agreed international specifications? check, issued decree 25/2014 ratifying Arab prison agreement.
- money laundering up to date and international standards? check, issued decree 27/2014, ratifying the 2010 Cairo Arab convention on anti- money laundering and terrorism financing.
- corruption laws being applied not arbitrary, but fair and international standard? check, issued decree 28/2014 ratifying Arab anti-corruption convention, plus already finally signed up for the UN anti-corruption standards too.

Whew. I wouldn't be too confident of those appeals succeeding.

Dodgy deal suggestions the new Anti-Corruption investigators could look into...

As the corruption prosecutions continue, I noticed how recent the events being used in evidence were. Juma Al Hinai, ex-head of Petroleum Development Oman's major tender board, was the Ministry of Finance's representative who chaired the tender board. Ostensibly there to provide independent oversight of the operator of most of Oman's oil production, instead he was caught with over $2 million in cash in his house and convicted of accepting a bribe from Galfar in 2011.

2011

Mr Al Hinai ran that tenderboard for years. Are we to imagine that this was his first indiscretion? Yeah, right.
it turns out that Juma Al Hinai also took money from OHI, a huge contractor, since the CEO Behram Divecha was just sentenced to 17 years and fined 1.2 million rials, for allegedly bunging old Juma a few 100k for each OHI contract he got through. Sweet deal. At the time. But where does this rabbit hole go? How could you be a director of a company paying massive amounts in bribes, in cash, and not know about it? Are we to believe a lifetime expat employee independently was withdrawing huge amounts of cash and noone noticed? And who in the banks facilitated these transactions? Interesting lines of inquiry indeed officer!
Equally, that an Ex-Minister gave a $1 million bribe to an undersecretary for the airport contract (see previous post), suggests the practice of bribing government officials involved with big construction projects was pervasive and accepted. So, looking back through the Dragon's archives, here are just a few deals that Muscat Confidential reckon the ISS and Government prosecutors could be looking into, because they really don't (and never did) look right:

1 - Omantel's purchase of WorldCall Pakistan.
In 2008, Omantel, a publicly traded company but still majority Government owned at the time, spent $200 million buying 65% of a small telcom company in Pakistan from a reclusive Omani businessman Sheikh Sulieman Ahmad Said Al Hoqani. This, even at the time, represented a huge premium on the traded share price - Omantel paid 25 PKR rupee per share, when a few months earlier it had been at around 10 PKR. Meanwhile, Omantel have pumped in an extra $70 million in cash, as the company continues to bleed cash since the first day of purchase.
As of yesterday, these shares were trading at 2.4 KPR, less than 10% of the purchase price, not including the 40% depreiation in the value of the PKR in US$ from 2008 until now. Market cap of Worldcall is now just US$20 million, with operating losses last year of about US$16 million. All metrics look terrible (negative and increasingly negative EPS, total debt is about 5 x market cap...) Why did Omantel's then CEO, Mohammed bin Ali Al Wahaibi, buy this useless, endebted, loss making company for a huge premium from an Omani businessman? Just coincidence, I'm sure.

2 - OMRAAN
The commercial arm of the Ministry of Tourism, Omraan has been playing as an Integrated Tourist Development project developer for quite a while. In the rush to get a venue acceptable to host the Asian Beach games, the usual tender procedures were suspended and OMRAAN got to spend as much as it liked getting things ready. In addition, the highly dubious attempts by MoT and Omraan to try and aquire the beautiful Capital Area Yacht Centre (CAYC) by apparently any means - bullying, threats, multiple legal action, refusal to accept the deed to the land signed by His Majesty Sultan Qaboos.

As far as I can see, they have done precious little except launch project after project [Yeti, anyone?] that are pretty much all either uselessly stalled after masses of money spent, or, badly built white elephants in the middle of nowhere, or, stealing real estate worth gazzillions and effectively turning public space into private and gov/oligarch Joint Ventures.

As it was not, strictly, a government department, Omraan could bypass normal government tender board procedures, and we know how strict those were, dont we? Oh, and the head of Omraan was a close relative of the then Minister ( now deceased).

And don't forget that disaster that was and is the high speed ferry . I know, they supposedly have a secret military capabilty if required, after a quick conversion, but still. What a turkey. Executed in the most bungled cock up way imaginable, with unsuitable ferries that burn fuel and can't dock anywhere 3 years after buying them. I'd laugh, but this is where the oil money is being poured down the drain. Now why would anyone do that?

3 - Blue City
Although a private company, the Omani Blue City partners who owned Cyclone LLC, 'HE' Anees Issa Mohamed al Zadjali (a newspaper editor working for his Dad's paper Times Of Oman) & His Royal Highness Sayyid Haitham bin Tariq al Said (His Majesty's cousin and Minister of Heritage and Culture), cost the country a heap of money. The way they got the land from the Government for almost nothing (on paper they paid around $80 million, for prime land that was later valued at almost $1 billion, plus a few extra prime km2 they kept apart from the development for themselves). The Government, via the Omani Investment Fund, eventually repurchased the secured bonds of the bankrupt company at 65 cents in the dollar from international investors, paying around $400 million to avoid an embarrassing claim on the land by Japanese investors.

If HH Sayyid Haitham really is on the official short list of those few Al Said males eligible to succeed His Majesty Sultan Qaboos, I hope he has had a big improvement in his judgement since the Blue City debacle. Let's all hope he would leave running the economy to someone actually qualified to do so...
but guys, ignore the private sector financial stuff. Focus on the original smoking gun: the initial land transactions. There's investigational gold in them there abandoned villas by the beach.

Momentum builds in anti-corruption convictions: Ex Minister confesses to massive bribery

Well, well, well.

There must be a lot of very nervous important people in Muscat right now. The corruption trials are rolling out the "Guilty" verdicts faster than a shwarma shop on a Thursday night, and big people are being sentenced to real jail time. Oman doesn't do nice prisons.*

The latest to fall is a very tall tree indeed - Mohammed bin Nasir Al-Khusaibi was found guilty (he confessed and expressed remorse) of paying bribes worth US$1 million to the (now ex-)undersecretary of the Ministry of Transport and Communication for civil aviation, to win a contract for his company employer CCC- plus likely as local partner himself a big bonus - the first phase of the Muscat International Airport. Mr Al-Khusaibi was (briefly) a Minister, and before that a very powerful figure in the now disbanded but once omnipotent Ministry of National Economy. He's now bunking next to big abdullah the axe murder for 3 years.

Mohammed Al-Amri, who served as said undersecretary of the Ministry of Transport and Communication, was jailed for three years, fined 1.2 million rials and barred from public office for 30 years. The court also sentenced Fathi Alaaiddin, the managing director of aforementioned Consolidated Contractors Company (CCC Oman), to six months in jail and fined him 400,000 rials.

This February, Muscat’s Court of First Instance threw the book at the CEO of state-owned Oman Oil Company, Ahmad al-Wahaibi, a scion of one of the big families very close to the Sultan from the 1970s coup d'etat days, giving him jail sentences totaling 23 years after convicting him of accepting bribes, money laundering and abuse of office. It seems the palaces, sports cars, huge salary and the life of privilege wasn't enough, and young Al Wahaibi felt he needed a few million stashed away. Yanni, you know how it is.

Now, these are just the verdicts issued by Muscat's Court of First Instance, and are still subject to appeal, so who knows what might happen there. If the convictions and sentences are upheld in the first appeals, people will be really looking over their shoulders. Now that the prosecutors are getting successes and confessions, the list of others facing solid evidence of them pocketing the envelopes stuffed with rials will skyrocket as many of those implicated at all levels confess and in turn offer to turn State's Evidence. And Omani courts love a good confession.

As more people talk, and more cell phones and emails are searched, the evidence will mount and the anti-corruption net will inevitably be cast wider and wider, gaining more informants looking to save themselves by confession and implicating others. Say what you like about the internal security boys and girls, but give them this sort of trail to follow and they will be pretty damn efficient, if that's what the person giving the marching orders, er, orders.

And person who gives the ISS those orders is HM, directly. Don't think for a second that the ISS is like the Ministry of Manpower. They get first dibs on recruitment and get shit done when required, especially a special assignment for His Majesty. It is amazing how talkative people get when assisting the ISS and ROP with their enquiries.

Where will it end? Clearly the current crop of prosecutions has the full support of His Majesty. The public verdict against Mohammed bin Nasir Al-Khusaibi is unprecedented both here and abroad. The ripples from this conviction - of someone recently so very very close to absolute power - are causing waves in nearby shorelines: UAE, The Kingdom, Kuwait and Bahrain are all experiencing similar corruption issues, if anything writ much larger.

But His Majesty must be aware of the danger of this becoming a witch hunt driven solely through absolute power as Sultan and direct administrative and executive power too. Much like a run on a bank, if the herd of capital and talent feel that this is going to be 'everyone', or in other words, 'them' rather than someone else, then the herd will panic and stampede for the exits. There's a reason all those palaces on the coast have big ocean going boats in sheds beneath. And private jets. And bank accounts outside Switzerland, if they know whats good for them I guess! Most of these guys are running so much leverage and debt anyway, net capital employed allowing for depreciation over the years is probably 9/10s of fuck-all. So they can split guys. If it gets to the point when you are selectively culling people for relatively minor criminal acts everyone was doing as a matter of common knowledge just to do business, be careful. Yet right now, HM Sultan Qaboos, Prime Minister, Minister of Foreign Affairs and commander of Oman's Armed Services, Police and Internal Security services is sending a pretty damn crystal clear message. Por encourage les autresSo a few more heads are going to roll. A benign dictatorship may not be how things are being described in the prison exercise yard right now. Your view on the benign part may depend on your perspective, but I reckon 99% of Omanis and residents are more than happy to see a few more heads in the basket right now. Metaphorically speaking.

Email me with any tips. I'm back in the saddle for a while. Lets see where this goes.

* Note. The Americans a few years ago issued Oman a formal complaint at the state of their prison system and the conditions people were held in. When the Americans, people who run an international gulag of secret prisons and who imprison more % of their population than anyone else, are lecturing you on your prison service, you have a pretty shitty prison service. Perhaps the delay in the trials vs the 'Arab Spring' kickoff was not to assemble an independent prosecutors office and gather evidence, but to build the new VIP wing at the prison... wonder who the contractor was, Galfar or CCC? Just an idea chaps, better check that new wing for secret tunnels eh? Not that you could bribe anyone to do that, obviously.

Undercover Dragon on Omanisation

Well, its been a nice slow weekend here in the castle. And I was pleasantly surprised by the email alert that famous Oman blogger Suburban had revisited the sleepy sultanate and was reporting on progress with Omanisation in her inimitable style. Heck it even drew old Jet Driver out of the woodwork. Wonderful!

Much to the disappointment of many of my ... readers... I am not writing this from the bowels of an Omani gulag. But I did sneak in for a visit recently as well. Immigration were very welcoming, bought some champagne on the way in, and headed for the hotel. More on that later perhaps.

But first I'd like to weigh in on this Omanisation issue. Suburban has already nailed point one - the Ministries. Far too large an employer wrt the economy, it encourages red tape, and means the bar is set so low, it drains motivation and competition from the local job market. It also feeds low level corruption and wasta, by empowering the mid level permit stampers to issue visas, permits for construction, plan and develop public infrastructure in partnership with the big wastafarians, etc etc etc.



So what can be done? Ok, apart from the ministry reforms everyone says is impossible, here are some ideas wrt policy.

1. Get rid of the sponsorship system. Phase it out if necessary. But this modern codification of (low wage) slavery is disgraceful. Get proper visas issued, in a public and transparent way instead of behind closed doors. The current system encourages and enables a culture of the rentier economy, where it's all "I dont need to work, I'll just (buy) a few indians and filipinos and they will do all the work. Then I'll get them to each earn an extra sum each month and pay it to me. I'll take their passports so they will have no recourse but to work for me". Go kids! While it may work for a while, a target business model for an entire society based on parasitising a vast underclass of exploited and enslaved people from another country, sufficient to supply all daily needs,... yuck. It may work for Dubai, but it shouldn't be a future to aspire to for Oman I think.

2. Citizenship. There should be a path to citizenship for long term non omani.

3. Minimum wage, enforced, for all employees, even 1 employee. Effectively raise the cost of hiring an expat for low level low skill jobs, such that its more doable for an omani. If the mcdonalds francise has to increase prices a tad, so be it. We eat too much of that shit anyway.

4. Make it easier to hire and fire omanis, albeit that you must replace them with an other omani. 2 weeks notice. 1 week per year employed as severance. Have a national pension fund system that you only can buy into via employment, but it moves with you from job to job. Do not let this be taken over by the ministry employees.

5. Encourage employment to be more flexible. Omanis seem to need a lot of time off during the day. Ok. Set things up more flexibly, so they can work different hours, or work part time and get paid less. Flex days, strict medical leave limits, days off without pay, etc etc. Imposing a western 9-5, 5 days a week, is not working.

6. Do more to get omani women into business and starting SMEs. We need more female entrepreneurial talent. Slap back any of this Saudi or Iranian influenced bullshit that women should be cloaked and locked away. In my experience, omani women were smarter, more dedicated, paid more attention to detail, got stuff done with less excuses, on time and more reliable, and generally were by far the better employee than the average omani male. Just saying.

7. Do more to get omanis into the oil field services businesses. Have more dedicated trade schools, run and administered by business segments, starting at high school. Target 'villages' that can effectively supply all the labour for certain businesses and installations: ports, factories, etc. Go with the grain on our tribalism and family, by having 'company towns' where the schooling, home life, and education are focused on the village trade/factory/product.

8. Increase use of automation and advanced capital machinery. Ie instead of having 25 Afghanistan workers dig a trench with 18th century picks and shovels, have an omani in a modern, air conditioned beast of a machine made in Korea or even China these days. Do more prefab construction in big air conditioned factories, where omanis and robots could make prefab wall panels, housing modules, even complete housing effectively, probably more efficiently and making construction more like a real inside industrial job.

9. Do more on tourism, especially within the middle east, China and Africa. Have tourist resorts that are 'dry' and ones that are not. Stop sitting on the fence. Have some resorts that are halal, and the rest for the rest. I've always liked the idea of a casino in the Omani enclave within the UAE. It would make an absolute killing. Do what singapore does, and charge omanis 100 rials to go to reduce locals gambling. But focus on the uae. It would employ loads and loads of omanis. Find a way around the religion thing. And please let me be a partner. Or a few catering concessions...

10. Have a solidly independent administered and graded entrance exam to be a gov employee. Freeze government numbers wrt full time employees.

11. Allow a broader civil society, with think tanks working on policy options. Most oman laws, especially from the disaster that is the ministry of manpower, seem to be written in a hurry, and are badly and broadly crafted mainly with a view to dictating outcomes with a legislative magic wand, rather than proactively enabling those positive outcomes through first principals. Free the media and the inline media. They are the means by which the government is held accountable. Media must be far more de-expatised. At the moment, the cowering indian staff of most media outlets are so afraid of pissing someone off and being deported and criminalised they are useless as a true 4th estate. And the omanis in charge are so entwined with the government, they are pliant in supplying the propaganda and the advertising money.



Look at how poor Andy in Oman, possibly the most genuinely nice person I've seen online in the omani bloggosphere, is being attacked and vilified in the national press. Disgraceful. (I do wonder Andy, why the Al Zedjalis have developed this weird pathological hatred of bloggers and online opinions... it is very peculiar. )



So, there we go. Must get back to the pool and the champagne. It looks like Ms Dragon needs some lotion applied.



But Suburban is right. If Omanisation keeps going the way it is, oman will go down the tubes. Far too much of the economy is totally based on oil and gas, and the income from these depleting resources are not growing in line with the population. You do the math.

the pendulum swings: creeping wahhabism cracks the whip via Ministry of Tourism

Ahh, the Ministry of Tourism.

The recent report on Muscat mutterings describing the crack down on bars and live music is very disturbing. This is not about tourists. Or expats who whine about moving to Do-buy. This is about the Oman government cracking down on omanis, and deciding what omanis can do in their own country. And apparently having a party with a band and dancing is verboten!

This is a clear side effect of giving more power to the religious parties representatives in the al shura. This is creeping Islamism. The rich, the wastafarians, the expats in their gated communities, they'll be fine. The tourists will get sorted.

is this the price for the defence of the Arab spring whirlwind? Less secular and independent institutions out the window, bring on the politically controlled religious police ruling by edict in the name of His Majesty. Pity.

gas deal with Iran announced. big deal if followed through.

While the Government works to protect Omanis from the corrupting influence of having the press mentioning homosexuality, other government ministries have been more productive. The recent visit of His Majesty to the Islamic republic of Iran resulted in the signing of a deal on getting Iranian gas. The Iranian press release stated that the deal would involve 30 million cubic meters of natural gas per day. That's a significant amount. Even more interesting was that the Iranian oil minister also quoted a price, saying the deal would give Iran (a much needed) 2 billion dollars per year, sanction free. Doing some quick math then is sufficient to work out a gas price of $5.17 per MMBTU, assuming the Iranians pay for the development of the gas field.

Actually, that's the big if. Who will pay for the development, don't know. I suspect Oman will at least have to kick in loans for the infrastructure, and 'pay' for the development.

That would be a great price for Oman, and would certainly be cheaper than say, domestic shale gas. The gas would provide enough gas to support the demands of gas-hungry Petroleum Development Oman, and leave extra for re-export as LNG for Korea and Japan at more than twice the price. Win for Oman, as right now the country is 'gas short', with such demand from PDO, desalination and power generation that the country has about 20% of its LNG capacity sitting idle due to lack of gas reserveAlso a win for Iran as that's 2 billion more than they are getting now, as well as tying the 2 countries together. Also a win for the Asian customers, as demand for LNG is very high after Japan's nuclear problems, and more gas will help lower spot prices.

so, where has the absent landlord been lately? And BLUE CITY... PART 3! The missing blog post...

It's been about 3 years I guess since I left Oman. And about year since I even logged on to my accounts here at Muscat Confidential. I just, well, lost interest, and being a long way away, I had so many other things to do. Meanwhile, My inbox on my email has over 6000 spam comments. Unmoderated.

So, what has the Dragon been up to this past year? Well, Ms. Dragon and I are still very happy living in a Western country, raising little dragons and living the good life. My treasure generating capabilities are being handsomely appreciated by my new employer, and the champagne cupboard is well stocked. No-one in this country is being threatened with jail for publishing articles on human sexuality or voicing opinions on a blog.

My contacts in the Oman security services reliably inform me there is no flag on my file, so I could return to the sultanate without any nasty surprises at the airport courtesy of the Blue City lads or the ministry of information. I may well do so, as we do miss the place, and it would be great to hit the beaches and see old friends again. We'll probably wait until winter though! .

Ahh, Blue City. Google it yourself, if you don't know what I'm referring to!

original cocaine fuelled description of blue city wiki entry - what a laugh!

Blue City Part 3

Blue city was poised on the brink of success back then. Before the crash. Everything was in place. The Bahrainis had arranged the finance, almost a billion dollars borrowed from the Japanese, albeit at a cost of nearly 30 million dollars to the mysterious swiss false-Oppenheimers. The 2 oman partners, one a subeditor in his dad's newspaper, the other the nephew of the ruler of the country and a governemnt minister, had a pot of money ( at that stage about 200 million they could actually get their hands on, the rest was all locked up in strange trust accounts administered by bank melon ny) that should have been enough to build around 30% of the original plan. All they had to do was sell the houses and apartments, build a marina and several hotels, and use that money to build it as they went.The real estate market was hot, and they were all going to make a killing. Billions of dollars. Snapped up by eager buyers from everywhere. They'd nabbed the land for a song via an inside deal. For less than a 100 million [on paper $85million was paid to the government for all the land, plus the partners kept about 4 hectares of prime stuff for them selves, seperate from blue city, btw. I suspect they probably bought the stuff with a post dated cheque that was paid by the loan anyhow], they had bought gorgeous, beach front land for what would later be officially appraised at over a billion dollars.

Sweet.

only one problem. As the local partners had no fucking clue about how to do a mega-real estate development with dodgy financing, design a plan that made sense and the whole legal pile of paper required to get the rating to allow stupid Japanese Bankers to invest other people's money.

so they had, right from the start a partner, who did everything except get the land. A Bahraini who was already delivering highly leveraged developments in Bahrain. To get him to arrange the deal, with no money on their part, they had had to give him majority control and ownership. The Bahraini's had 70% of the shares. So the local investors essentially locked him out, literally, by not letting him into the building. They bought off paid the existing CEO a cool million I'm told, to hold his nose and do what he was told. They then recruited a good american real estate guy with a record in the UAE. They didnt sell many properties, because by the time they had redesigned everything, renegotiated contracts, restaffed the place, built themselves a 2 million dollar sales office, contractor camp, and were just about out of money to keep up the payments to the contractor.... the financial crisis hit. If only they hadnt delayed those crucial 2 years and pissed away all the money. Ooops. Meanwhile, before the shit hit the fan, they sued in the courts for 100% ownership of the project over some bizarre technicality, wasting more time. Upheld at first, overturned on appeal, but the case finally returned to them in the supreme court. (Wink wink. ) , And Mr Editor, with zero experience in real estate, took over operational control of Blue City. Living it up large as the genius who who build this new city. All fired up on his own marketing and ego. He was a friend of michael jackson, dont you know. And his marketing person from italy was very very high performing im told, even if her salary was 7000 rials a month. Thats about 250000 dollars a year tax free, plus expenses. As the Bahraini company had done the master plan, with south African contractors who hadn't been paid either, they could keep the plan, it wasn't grand enough and it made their legal case untenable if they kept the original plans, tainted as they were by being done by the Bahraini s. thus the new team under the guidance of the paperboy Chairman and CEO proceeded to spend the remaining cash like no tomorrow. They did a whole new redesign, by a renowned company (Norman Foster, no less). They commissioned golf courses, travelled far and wide ( business class for the plebs, first for the principals), paid mediocre expats vast salaries, paid to win so-called awards for design and their grandious plans for a new capital. It would require vast government infrastructure investments, but hey, I'm sure one of the owners could handle that.

And Blue City, as we all said it would, went bust. The poor loss making Japanese bankers were bought out by the omani government investment fund at about 65cents in the dollar via a shell UAE company fronting the deal (more huge fees to middlemen), for the secured notes that would have enabled the bondholders to foreclose on the land. The half constructed hotels and apartment buildings are left surrounded by barren wasteland. The people who paid a deposit for apartments I presume were bailed out on the quiet by the government, and perhaps the government at least collected on the insurance and escrow funds, and nobody said anything. No front page articles in the week. All that happened is basically a couple of totally inexperienced Oman businessmen blew around 1% of the countries GDP on a megalomaniacal exploitative real estate deal that they totally screwed up due to their exceptional incompetence, greed and hubris. When they went spectacularly bankrupt, then they were rescued by the government, off the official books via the sovereign wealth fund, spending 500 million dollars to rebuy a piece of land they had owned before and had sold for 85 million. Blue city declared bankruptcy and the contractor left the country. All the expats were slowly sacked, most without what they were promised. It was a total cockup. Costing the country about a half a billion. And it was all wasted. Pissed away. By a well connected pair of amateurs who managed to borrow vast amounts under the aegis of the Royal Family, and got so gready the couldn't stand the idea of only making around 300 - 600 million for basically nothing. They had to have it all. Ah well. And nobody went to jail, because if youve got that sort of wasta, well, then the government bails you out on the sly with the public's money.

so that's alright then.

and that folks, was Blue City, part 3. Finally.

Wow. It's a little strange to be back. But seeing Oman back in the international news over the 'The Outsiders' homosexuality cover story in The Week, and the not surprising news that the Government shut them down and are prosecuting the editor and journalist under Omans draconian press laws, prompted me to reactivate Muscat Confidential.

My old post from 2010, where I published an interview with a gay expat living in Oman - here's the link exclusive interview being gay in Oman - has being getting a lot of traffic lately, as searches prompted by the article find it. Looking back at that post now I'm still proud of it. It holds true today.

I was frankly amazed when I read about The Week publishing something on being gay. OK, not what I would call a very good story, starting out by essentially inferring the gentleman was somehow made gay by being molested as an 8 year old. But I quibble. It was a very brave thing to put on the cover. Given the tremendous homophobic feelings in public Oman society, the editor must have know what a shit-storm it would generate. I hope it was deliberate.

Oman is far from alone in having anti-homosexual laws, let's face it. (Russia anyone?) But I do wish people would look at the science, which clearly shows that being sexually attracted to the same gender is fixed at birth. Which makes sense, because in this world who would choose to be gay? But as with all bigotry, be it a hatred of skin colour, or gender, or race, or even being say, a Muslim in the West, this too is rooted in fear of the unknown and ignorance. Try being gay in most places in this world, and you're in for a bad time in the public sphere.

So while I think criminalisation of what 2 consenting adults do with each other in private is always a dumb idea in my opinion, this is about reporting, not where someone sticks their dick. If the Sultan of Oman wants to make such sexual acts criminal, i guess His Majesty is entitled to do so, with laws being inhumane and unenforceable not being a problem with Oman's laws in other areas either. But to criminalise a news report on what is actually real, something that is true, well, that's really stupid. I didn't realise pandering to the ignorant and the bigoted was the 'for public consumption' official Ministry of information policy.
Blindfolds all round when it comes to homosexuality in The Sultanate I guess. No change there.
For goodness sake, let's not allow reality to impinge on our newspapers. We might have to face reality. And talk about it rationally. Never really a strong suit of Oman society.

Enforcement of our strong cultural traditions of intellectual denial and the defence of ignorance continue unabated. Business as usual.

So that's alright then.

Did the Omani Government break the law by publishing the photos of the activists jailed last week?

Everyone knows that the poets, 'activists' and others that were convicted of insulting his Majesty, Sultan Qaboos, have been sentenced to between 6 months and 1 year in prison.

And everyone who writes, comments, blogs, host's a forum, or writes or edits a newspaper seems worried that more arrests are likely.
Here's the report from the UAE's Gulf News:

Muscat: Literati in Oman has reacted angrily to government-owned media’s decision to publish photographs of four writers/poets in prison uniforms after being convicted by the Primary Court in Muscat last week. Both official dailies – Arabic as well as English – published the court verdict against Hamoud Al Rashdi (writer), Ali Al Muqbali (blogger), Hamad Al Kharousi (poet) and Mohammad Al Rawahi (poet) along with their photographs in prison uniform. The government-owned Oman News Agency had carried the news along with the photographs.

Three of the activists have been sentenced to one year in prison and one to six months in prison. Fifty nine signatories, including writers, poets, journalists, lawyers, activists, teachers, theatre personalities, students, and bloggers, demanded an apology from the news agency as well as publications for publishing the picture of four convicted activists with their photograph in prison uniform.

The signatories pointed out that the decision by the official media to publish the photographs of four convicted by the court was an unprecedented one and insulting to the four intellectuals in the country. All the signatories have termed it unacceptable and threatened boycott of Oman News Agency and two newspapers unless they apologise for publishing the pictures. “They are not traitors nor are they hard-core criminals then why publish their pictures that too in prison uniforms?” demanded writer Ebrahim Saeed.

He told Gulf News that it was sad that the report also carried graphic details of the convicted activists, including their birth place, tribe, residential place etc.

“It was shocking to see the report with picture of respected Omani poets and writers in prison uniform,” Turki Al Balushi, founder of Oman’s newest online publication http://albaladoman.com/ , told Gulf News. Yaqoub Al Harthi, lawyer for some of the detained activists, told Gulf News that there was no need to publish details and photographs after conviction of the four.

“Some of them have made a mistake,” Al Harthi agreed, saying that writing against the country’s leader on social media was a mistake but didn’t deserve the kind of publicity given to their conviction in the official media. “What was the need to publish graphic details of the activists and their photographs in prison uniform?” he questioned.

The official Arabic daily, ‘Oman’, in an edit, clarified that it had no intention of insulting the convicted activists but as a whole news package it was decided to publish the photographs. The edit also confirmed that the Omani literati had sent a memorandum condemning the publication of the photographs.

Meanwhile, Al Harthi also said that the lawyers have had no opportunity for one-on-one meetings with the detained activists. “We have had to meet our clients only in the presence of guards,” he added. He represents Esmail Al Muqbali, who has been detention for over a month. “I have met Esmail only once in court in the presence of guards,” he said worriedly. However, Al Harthi said that last Wednesday he was informed by the authorities that he can meet his clients (activists) in the central prison in Sumayil. “I am still not sure if I would get to meet who and how,” he said. Esmail was one of the first three activists to be held when they went to meet striking workers of contractors working for the oil companies.

The protest by the 400-odd Omani employees of private contractors working for oil companies was the latest protests in Oman since the first Green Rally taken out in January last year after Arab Spring sparked protest in Tunisia and Egypt. The protests in Oman were different. People demanded employment, better working condition, improved wages and removal of alleged corrupt officials. The protests in some places, mainly Sohar turned violent and fatal but overall the protests were peaceful. Sultan Qaboos Bin Saeed responded positively by ordering creation of 50,000 jobs, starting unemployment allowance, making major changes to the cabinet and granting more powers to the elected Shura council.

Well done to those publicly and bravely calling for some review of this whole affair. Is someone in the Public Prosecution deliberately doing this to inflame people's opinions AGAINST HM Sultan Qaboos? Because this is really really stupid. And when something really stupid happens in Oman, it's usually some idiot in the Government, not asking HM what to do.

I can only interpret this as a knee jerk reaction from the old guard who somehow don't watch TV or surf the internet I guess. Because a few signs and some blogging that sort-of criticise HM is hardly the stuff of sedition. But strikes will certainly hurt the rich and powerful businessmen.

The problem I've always had are these incompetent fools in positions of power who already use the vast swathes of the law - a law that already makes it illegal to do or publish almost anything in reference to the Government - to then go on and wrap themselves in the protection of lese majesty laws. They wave HM's name to cover their own sins.

As a result, Oman is being unfairly dragged into the mud of international opinion that's putting us in the company of Bahrain and Saudi, and begging ignorant comparisons even with Yemen and Syria.

But then to top it off by publishing their photo and biography is quite unbelievable. They have no idea that while most Omanis, knowing only what is in the official media, may not like these protestors I don't think they want them in jail on such petty charges when we know that is not why they are really being arrested.

Overseas followers of Muscat Confidential should understand that this publishing of their pics is illegal in Oman and strongly goes against the traditions of the culture. Why to even publish the photo of a common thief is agreed to be an insult to their family (who are innocent, goes the argument) and is illegal under defamation laws.

Or it seemed to be. Because now the Government have published these photos, almost it seems as a deliberate slap in the face to them, their families and associates. Clear intimidation.

So, what I want to know is Mr Public Prosecutor, is it still illegal to publish details and photos of convicted people, and thus by implication that the Government has broken that defamation law? Or is it suddenly not illegal to do this now, so Muscat Daily can now have a Court Report, complete with photos and full names?

Or is it perhaps that you just make this shit up as you go ? Because you are so used to doing what you like, arresting who you like, bullying who you like, always having your way because you're so sure you're in the right, and because you're the Government, you're untouchable by definition?

And denying them legal advice achieves what, exactly?

Does no-one in this abysmal mis-handled cock-up of a response (to a few people making a nuisance of themselves to the Oligarchs) even notice that the Government are breaking the very same law and tradition that captures the moral spirit of the laws they are at the same time using to put some harmless poets and shit-stirrers in jail for a year?? [slap forehead]

His Majesty must move to more rapidly develop a constitutional monarchy, with an administration founded on the generation born after he came to power. There needs to be a significantly greater separation between His Majesty and Government, so lese majesty laws (which within reason seem perfectly OK to me as they apply to a Sovereign) can be removed from restricting public protests and discussions on Government and policy.

The system could be inspired by that of Jersey, one of the Sandwich Islands, ruled by the Sovereign of the British Isles for more than 900 years, with an appointed Governor and head of Parliament with elected members.

Which is ironic, because the current massive over-reaction to a few Omanis with the balls to complain are reminiscent of Queen Elizabeth alright, except it's Queen Elizabeth the first. You don't see Lizzie throwing people in the Tower of London for such petty nonsense, it's beneath her to stoop to such things.



Time is running out Sultan Qaboos. Because these other idiots all seem to think that they can behave as if they are the Sultan, throwing their weight around and telling people what to say, what to do, if it doesn't please them. Oman is increasing full of little dictators who abuse the system of governance to put these draconian laws between themselves and the people.

Oh, and where are the corruption investigations? Or is the official position that there isn't any? Because HM has nothing to fear from the people, as we all know. It's only incompetent Ministers and their minions who need worry about them I guess. And that's what this is really all about, isn't it Mr. Public Prosecution?

Oman Football Association scores own goal with FIFA

The Oman Football Association were in a spot of bother earlier this month. 3 clubs had taken the Association to court in a squabble over who runs things, and won a decision to overturn t he election of FIFA's official body in the Sultanate.



FIFA were not impressed, and responded that no court tells FIFA what to do, and that they had observed and approved the election. They sent the OFA a letter stating that should the courts decision be implemented, they would throw Oman out of FIFA, meaning no World cup 2014 qualifying matches.

FIFA has reminded the Oman Football Association that all FIFA member associations must manage their affairs independently and without influence of any third parties, as clearly stipulated in articles 13 and 17 of the FIFA Statutes. This is in relation to the apparent award by the Administrative Court in the Sultanate of Oman on 25 June 2012 following an appeal by three OFA clubs, in connection with the OFA elections of August 2011, the enforcement of which would allegedly entail the nullification of said elections and the organisation of a new electoral process, FIFA confirms that the OFA elections were held under the strict observation of FIFA and AFC representatives and that those representatives duly asserted that the procedure of the election of the Board of Directors was carried out in accordance and conformity with the precepts of the OFA statutes. FIFA stresses that article 64 of the FIFA Statutes state that recourse to ordinary courts is, as a general rule, prohibited and that all FIFA member associations must ensure this stipulation is adhered to by their members. Should the aforementioned award of the Administrative Court materialise, the matter would be referred to the relevant FIFA bodies to take appropriate measures, which could extend to an immediate and indefinite suspension of the OFA. Such a suspension would jeopardise the participation of Oman in the 2014 FIFA World Cup™ qualifiers and in other international competitions, and would also mean that neither the OFA nor any of its members or officials could benefit from any development programme, course, or training from FIFA or AFC while the OFA is suspended.

Ooops. Cue panic.
OFA news release.

So now
Sayyid Al Busaidi, is refusing the court oder and appealing to the Ministry of Sport. He wants the minister to somehow reverse the court by force of personality I guess, and give them the red card.

Yesterday the Oman Football Association met with 35 local clubs to discuss the verdict issued by the Administrative Court following a case filed by three clubs in Oman, Seeb and Muscat to dissolve the OFA board. All of the 35 clubs that attended the meeting restated their support for the current OFA board and expressed the need to unite to resolve the current case filed with the Supreme Judicial Council. The board of members have rejected any resignation suggestions by the three clubs and will continue to run the OFA until the end of the current tenure – 24 August 2015. Sayyid Khalid Bin Hamad Al Busaidi, OFA Chairman, said: “We have reached the decision to appeal to the Ministry of Sports Affairs to request the Administrative Court to pause the implementation of the verdict issued last week as a result of inaccurate data provided during the trial. We are confident that the OFA can work together with the support of the local clubs to help revise the court decision in order to retain The OFA has also approved the formation of a dedicated committee of nine representatives from local clubs and the OFA to oversee the process with the Ministry of Sports Affairs. In the meantime, the OFA board will approach the three clubs that filed the court case last year and try to convince them to withdraw their complaints in the effort to preserve the OFA’s reputation and the future of Omani football.  

There have been issues with Oman's soccer administration before, with the election contested, and actual voting for a position with power. The leadership of the most popular sport in Oman gives access to funding, lots of overseas trips, and wasta. It'll be interesting to see how this is resolved. Most likely by the 3 plaintiffs being strong armed into withdrawing the complaint, somehow even after judgement. Do any readers have some insight into the deeper currents behind this struggle?

Oman's first IPO of 2012 - Bank Nizwa, Islamic Bank - a tremendous success!

Ex-Minister of the Ex-Ministry of National Economy, HE Macki was always opposed to so-called Islamic Banking. But after the post-protest mass sacking reorganization of the Cabinet, and the departure of Mr. Macki to the land of gnomes, it was back on the agenda.

You see, with the opening up of the free trade region, Omani's were exporting deposits to Islamic Banks in other GCC countries at an increasing rate. That was the convincer.

So with great enthusiasm a few big wheels decided to start Oman's first bank that will base their operations on Sharia principles. The IPO was a great success, almost 11x over subscribed and raising $160 million.

In typical Omani style, the bluster and enthusiasm combined with a slopshod approach to corporate governance and management was not matched by performance.

The initial shareholders meeting, required to establish the 'constitution' of the company so it can legally start operations, couldn't make a quorum of the required 75% of shares. Oh dear.

So the company set up with over a 150 million dollars in shareholders cash can't even organize a meeting. And not just any meeting. The most important meeting a public company ever has, its first General Meeting. This is now being seen as representing not just (by definition) a big Omani company with piss-poor management, but as casting doubt on the competence of the Muscat exchange to run a real public offering. The Dubai exchange must be pissing themselves laughing.

Of course, all of this in no way whatsoever reflects badly on the reputation or honour of the very important Omani people involved. They have moved heaven and earth to bring this tremendously important and complex project to what has been, in reality, a great success. The backers of the company, the outstanding advisors, and the stock exchange itself are run by the best there is. They're just great. They not only did everything humanly possible, but did it with the highest of intentions, guided by the vision of His Majesty in this glorious time to be a banker in Oman.

And the Government regulator was totally blameless. Nothing they could have done to avoid this.



This delay and mix-up was not only completely understandable, and normal, and yanni to be expected,and inshallah the paperwork will be ready soon.

There's certainly nothing for anybody to get offended or insulted about here. Just keep repeating what a tremendously successful thing Bank Nizwa is. I'm sure the crack reporters at The Observer and Times of Oman are on the case.

The reputations of those responsible must not be tarnished by a mere failure to achieve results. This is in line with the deep cultural traditions of Omani society not to point out in public when someone - especially someone officially very important - cocks everything up. Whoever was responsible was certainly not Omani. They will be found and sent back to the sub-continent they came from.

Fortunately, we have laws in this country. Laws to protect people's reputation from things like a public discussion of observable facts that relate to their performance.

And whoever it was that pointed out the mistake and officially noted the lack of a legal quorum at that meeting deserves a promotion. Now that was a person actually doing their job.



Post-press: Times of Oman publishes Bank Nizwa response.

.... However, Ahmed Said Al Rawahi, Chairman of Bank Nizwa Founding Committee, stated; "The bank's launch preparations are progressing as scheduled. Our staff is in place, the first three branches at Muscat, Nizwa and Sohar are currently being fitted out, the core banking system has already been deployed, and the product portfolio is under approval.

"The general meeting could not be concluded on the appointed day of June 21 as Bank Nizwa has a large base of over 37,000 shareholders with many of them not being in the country owing to the current holiday season. This made it difficult to achieve the requisite attendance norm and we are rescheduling the meeting. We are confident that in the next meeting we will have the requisite quorum, he explained. As per the law, votes representing 75 per cent of the bank's capital are required to conduct the meeting. Bank Nizwas has 92 founding members, who have collectively invested RO90 million.

'We are on track'
Saying that the rescheduling will not affect the bank's launch plans, Al Rawahi noted, "I am glad to inform that we are on track to be ready to open our doors to the public during the third quarter of 2012, subject to CBO approval.

The date of the new meeting is being agreed with appropriate authorities and will be scheduled to take place sometime within the next six weeks, in keeping with Capital Market Authority regulations.

Market sources said there is no clarity on when the regulation on Islamic banking will be issued and when Bank Nizwa to commence operation, which have affected the bank's share prices on the bourse. "There has been a lack of interest among institutional investors, while retailers continued their selling, said Kanaga Sundar, Senior Analyst at Gulf Baader Capital Markets.

Yes indeed, so as I said, everything is a great success and it's all going according to plan.

Public Prosecution arrests bloggers. Oman named 'nicest police state in the world'.

It's been a busy month in the Dragon's lair. While I was gone, it seems the Public Prosecution Dept decided to expose the reality of Oman's law on speech - it's illegal. The story from Human Rights Watch is here

As local blogger Susan Al Shahari notes, the law is far from clear as to where the line is between fair comment and jail time. This is an issue discussed before on Muscat Confidential here

“Article 26: It is prohibited to publish anything which may prejudice the safety of the state or its internal or external security or all that relates to military and security apparatuses, their bylaws and internal regulations, any documents or information or news or official secret communications, either by publication through visual, audio or print media or through the Internet or any means of the information technology unless a permission is obtained from the competent authority.

It is also prohibited to publish the wordings of the agreements and treaties concluded by the government before they are published in the official gazette."

Oman's citizens and residents have never had freedom of expression, as it has always been subject to broad, vague, ill-defined rules that make any critical statement about the government illegal. And not just illegal, but criminal.

If the report is correct, the bloggers have actually been charged with incitement to protest. As noted in the HRW article, this is even more insidious, as apparently even the law for this charge is secret.

On June 4 the public prosecutor formally charged all three with “inciting to protest,” and released al-Hana’i and al-Khorousi on bail. The public prosecution renewed al-Meqbali’s detention for an additional seven days while it researched further charges, though none have been announced. An Omani lawyer who asked not to be identified said that the charge of “incitement to protest” is a state security crime not covered under the regular Penal Code. Authorities have not made public the code enumerating crimes falling under state security and punishments associated with them.

Several of the 'activists' have started a facebook page 'Humanitarian initiative for human rights in Oman'. Check it out!

The ROP and Public Prosecution are out of their depth, holding several arrested without charge or access to legal council for 4 days, according to the HRW report. The laws are so broad and draconian that denying them the few rights they actually do have [24hrs before you should be charged and given access to a lawyer, no beatings or torture] is really stupid.
The facebook page is reporting another arrest too, this time of a photographer.

Folks, try to understand. Oman is governed as an autocracy. In fact, Oman is one of the few absolute monarchies left, the others being Saudi, Brunei, Qatar and Swaziland. HM is not bound by a constitution, he can issue any decree he wants.

You've probably noticed that all laws are "Royal Decrees", as only the Sultan can make law. You get to 'vote' but political parties are banned. And the people you elect can only make requests of His Majesty Sultan Qaboos. It is a criminal offense to criticise the Government. It is a criminal offense to encourage anyone to protest. It is a criminal offense to protest without permission. It is even a criminal offense to publish the name of someone who has been convicted of a crime in public court!

You do not, and have never had, a right of free speech. You are only allowed to express yourself if what you have to say supports the Government, and doesn't offend anyone. That a statement is true is not a defense. That a statement is only of personal opinion is not a defense.

Reread that new article 26 above.

Is it any wonder The Economist just called Oman "the nicest police state in the world"?

3 Omanis wanted by Interpol

It's been amazing to see some of the stories making it into the newspapers lately.

Times of Oman published an article asking for CCTVs in Oman's high schools to get drug dealers ‘CCTV in schools must to arrest drug peddlers’, in a story by Oman's top Journalist Saleh Al-Shaibany. The article is unusual in that it admits there is a huge drug problem in Oman:

... The problem of drug trafficking has become so serious in the Sultanate that it prompted the ROP to establish a new department last week. Records show that once youngsters get hooked up to drugs, if they don’t get help, they may even commit suicide. One of the most prevalent problems in the country is the absence of dedicated rehabilitation centres to take care of this menace widespread in the Omani society.

A recent UNICEF annual report said, “The use of drugs among adolescents, particularly girls, is of concern in Oman. There is only one rehabilitation hospital for the entire country.”

Hospital Ibn Sina is the only hospital that offers rehabilitation for drug addicts but many feel that the centre mainly offers a short-term detoxification rather than an extensive treatment. For some reason, the government recently scrapped plans to build a specialized drug rehabilitation clinic at Al Khodh, close to the Sultan Qaboos University Hospital.

“It is good to see that the ROP is setting a new department. This effort will help reduce smuggling and sale of the drugs but will not help people who have already become addicts. We need a proper rehabilitation centre on par with the international standards where an addict can get at least six-month treatment,” Khalid Al Massoudi, a father of 22-year-old drug abuser, told Times of Oman.

Massoudi said that his son was given a free sample by some people who came to his school when he was just 15 and now he has become an addict. Initially, we didn’t know but when we started noticing expensive items missing from home, including money, and behavior of my son, we realised that something must be wrong with him. Late on we came to know that he needed cash to buy drugs for his daily consumption,” Massoudi said.

Excellent reporting Saleh. Although I'd have loved a few anon interviews with these addicts in school. If any of you high school girls are reading this, send me an email in between chasing the dragon on tin-foil. Unlike your male counterparts, you probably can read and write English. I can probably really improve your music selection too.







It was also interesting to see this report on Interpol issuing international arrest warrants for 3 Omani citizens. Despite the warrants being published, Times of Oman still can't bring itself to print their names or photos.

According to the Interpol, 46-year-old A.S.S., 32-year-old H.A., and 28-year-old A.B.S.S.S. figure on list of Interpol’s ‘Most Wanted’ criminals from Oman.

According to the premier investigative agency, A.S.S., an Omani national and a resident of Muscat, is wanted in several cases of counterfeiting, forgery and fraud cases in Oman. “His height is 1.68 metres and colour of hair and colour of eyes is black,” the agency said.

It seems we can admit our high schools are plagued with drug dealers and teenage girls on Heroin, but god forbid we actually name a criminal. Bizarre.

So here are those wanted criminals, in case you spot them in the queue at Lulu:

Suspect No. 1

Photo: Interpol wanted list. Said Khamis Ayil Al Salti

Said Khamis Al Salti, DOB 01/11/1965. Wanted for counterfeiting, forgery, & fraud. AKA A.S.S.


Suspect No. 2

Photo: Interpol wanted list. Saif Sahlouf Said Al Badi

Saif Sahlouf Said Al Badi, DOB 11/10/1983. Wanted for fraud. AKA A.B.S.S.S.


Suspect No. 3

Photo: Interpol wanted list. Ali Hooti

Ali Hooti, DOB 06/10/79. Wanted for Crimes against humanity, Organized crime/transnational crime, Terrorism, Crimes involving the use of weapons/explosives. AKA H.A.


This is the guy wanted for the bombing in India, and apparently is Omani born, despite reports.


And finally.

Speaking of photos no-one wants to print, look how happy HM looks, arriving in Croatia.

Photo: HM Sultan Qaboos arrives in Croatia at the start of a well deserved vacation. Doesn't he look totally GQ?

HM arrives in Croatia for well earned vacation, locals star-struck

Just a quick one: HM Sultan Qaboos has arrived in one piece in Croatia, and is safe and sound on his magnificent yacht Al Said. Happy holidays your Majesty. Here's the story breathlessly reported by The Croatian Times.

Royalty arrives in Dubrovnik Croatian Times
The Sultan of Oman, said to be worth more than the Queen, arrived in the Dalmatian tourist city of Dubrovnik yesterday (Sun), reported Croatian daily newspaper Jutarnji list. After landing at Cilipi airport in his private plane, Qaboos bin Said Al Said, 71, was transported by helicopter to his awaiting 156 metre super luxury yacht "Al Said", which has been anchored in the Dubrovnik port of Gruz for the last 3 weeks, together with its accompanying boat for logistics "Fulk Al Salamah".

The Sultan was met on his arrival in Dubrovnik by Mayor Andro Vlahusic, who wished the Sultan a pleasant stay before he boarded his super yacht, which is currently one of the top five biggest yachts in the world.
It is unknown when the Sultan will depart, however, his two yachts are due to leave Dubrovnik on 5 May. There has been talk that the Sultan of Oman is in Croatia to look at possible investment possibilities.

Croatia is struggling a bit financially. You can see why they'd love some business from the State Investment Fund. I'm sure His Majesty will be well looked after.

I wonder where his flotilla will set sail for next?

Omani terrorist arrests in UK. Plus, Government Gas contracts: When you've gott'em by the balls... Twist.

Breaking News: 3 terrorists were nabbed in the UK coming from Oman.

3 Arrested at Heathrow on Suspicions of Terrorism
By RAVI SOMAIYA
Published: April 20, 2012
LONDON — Three men have been arrested at Heathrow Airport and held on suspicion of “possessing articles and documents with intent to use them for terrorist purposes overseas,” the police said on Friday.

The suspects, residents of Britain’s second-largest city, Birmingham, were arrested Thursday night as they arrived from Oman. The police did not release their names.

The three, aged 33 to 39, were detained by officers from the West Midlands Counter Terrorism Unit as part of a “preplanned and intelligence-led” operation, the police said, that was not mounted “in response to any immediate threat to public safety.”

They were held under Section 57 of the British Terrorism Act. That law makes it a criminal offense to possess materials that create a “reasonable suspicion” that they are “for a purpose connected with the commission, preparation or instigation of an act of terrorism.”

A police spokeswoman said British officers had traveled to Oman to meet with the authorities there before making the arrests, but she declined to provide further details about the operation or to describe the articles and documents the men possessed.

Oman, a small Arab nation that borders Yemen and Saudi Arabia, has not previously figured significantly in Britain’s long struggle against homegrown groups of Islamic extremists who have roots overseas. Earlier this week the British government rearrested Abu Qatada, a Jordanian-Palestinian militant preacher accused of being one of Al Qaeda’s leaders in Europe, and said it would resume efforts to deport him.

A couple of other interesting news items over the past few days.

Potential for Shale Gas in Oman?The Ministry of Oil and Gas was touting Oman's potential for the new 'unconventional' shale gas (& oil) plays that are all the rage in the global oil market [a big 'thank you' to the good ol' USA for figuring that out for us, BTW].

It follows the recent expro on Oil and Gas held in Oman last week. Read all about it in the Oman Observer in a press release by His Excellency, Nasser bin Khamis al Jashmi, Under-Secretary, Ministry of Oil & Gas. The Government is desperate for gas, having over built LNG capacity and given away large amounts in gas contracts to stimulate associated industry in Sohar and Salalah. Oxy got the Mukhaisna oil field project mainly because it could bring gas for steam from Qatar, via its Dolphin project.

The Observer also had this cracker of a headline:

Oil and gas expo showcases OER tech[sic]

It seems the ace young Hacks reporters at the Government's news agency can't even spell the 3-letter acronym "EOR" correctly [that's Enhanced Oil Recovery chaps, EOR].


Shale Gas. Not cheap, but there could be an awful lot of it in Oman. At a price.

PDO was quoted as having a $20bln spend over the next 5 years, all of which will need to be paid from production sales. Not included in that cost is the vast amount of natural gas PDO consumes to get that oil. Steam EOR requires gas fired boilers, even if some are from secondary heat recovery units on power stations. On top of the steam, PDO consumes about 700 mega-watts of power, all of it generated by gas.

EOR and fraccing all this unconventional gas and oil is very expensive. Hell, they can't get that to pay in the USA at $3/MMBTU, and that's a country that can drill and frac holes fast and cheap.

The price of oil may well be high enough for PDO's steam and stuff to more than repay, but a market price for gas in Oman (or the region) doesn't exist!

British Gas walked on Oman's Abu Butabul gas find because the gas price was too low. BP are struggling along with the Khazzan gas field, which may pay at $2.50 in places. But in all this the price of gas is a huge issue.

If only the MONE Ministry of National Economy [now defunct] hadn't gaven away loads of gas Oman's gas to Industrialists at dirt cheap rates! $0.77 per MMBTU to the Indians (and yourselves with a carried 50%) for fertiliser; same $0.80 deal for the Wizard of Oz to make Methanol. Even more generous - non-inflating fixed price contracts too! [see the laments of MC passem]

Thus Oman, with no extra conventional gas and rising internal demand to meet power and water requirements, has 20% shut-in capacity in it's 3 LNG export trains as a result. And Japan is gagging for LNG right now. Oman needs more gas* to liquify and send to the Japanese. But looking for the stuff is expensive. And gas supplies are tight. You can't shut the lights off in Muscat. What to do?

The Minister and his undersecretary suggest Foreign Oil companies come in to Oman and invest risk capital to explore for these shale gas and oil deposits, outside the patch of the dominant player (& majority Omani Government owned) PDO and their infamous and productive 'Block 6' concession (The gas is owned 100% by the Government, by the way). After all, there may be opportunities for these companies to strike it rich if the gas price is high enough, and Oman keeps its promises on tax and other fiscal terms. And Oman would get the gas it craves.

Sounds good! Where do I sign?

* Technical Factoid. Selling Natural Gas is different to oil. Most gas is effectively sold 'in the ground' over a long time period. If Oman could be sure of getting more gas from somewhere else in the future, they could 'swap' this new gas for already developed and sold existing gas. Thus the new gas could be immediately sold using existing capacity for the LNG projects and from PDO, plus that would increase oil [condensate] production as an added bonus!

In Other News
It was reported yeaterday that The Ministry of Oil and Gas has decided to break its gas supply contract with their Indian partners in the Oman Fertiliser Plant, Oman India Fertiliser Company (OMIFCO), a joint venture firm between Oman's state-owned Oman Oil Co (OCC) and Indian co-operative firms KRIBHCO and IFFCO. This is a business originally designed as a way to convert cheap, really cheap, gas into Urea for export to India, and to stimulate nearby business and infrastructure. [for reference, $0.80 per MMBTU is about $5/bbl oil equiv.]

The Urea plant & port has already been built and is working, but any extra gas supplies implied as an option in the Gas Supply contract were quickly cancelled after comissioning.

Since then, Oman has now threatened to turn off the taps altogether unless the Indains agree to pay a lot more for the gas - from $0.77 (constant, no inflation) to $3.00 with inflation added every year. Not withstanding the contract signed by the Government to supply long term gas. Surprise!


Photo: The Minister of Oil and Gas renegotiates a Sovereign Omani Non-renegotiable long-term Gas Supply contract. Go ahead, make his day.


As reported in the The Indian Express

Oman cuts gas price to $1.5 per mmBtu, but with riders
New Delhi, Tue Apr 17 2012, 16:33 hrs

Oman has halved the price at which it will sell natural gas to an Indian fertiliser plant in the Gulf nation to USD 1.5 per mmBtu but has added an annual escalation clause.

Oman, which had previously proposed to raise rates of gas sold to OMIFCO's urea manufacturing facility at Sur to USD 3 per million British thermal unit instead of present price of USD 0.77 per mmBtu, has revised its offer to charge USD 1.5 per mmBtu, sources in know of the development said.

The Gulf nation has also set a rider that gas price would be hiked by USD 0.5 every year till it reaches USD 3 per mmBtu.

Oman India Fertiliser Company (OMIFCO), a joint venture firm between Oman's state-owned Oman Oil Co (OCC) and Indian co-operative firms KRIBHCO and IFFCO, produces about 2 million tonnes of urea a year at Sur for exports to India

Oman had contracted to selling gas to the plant at USD 0.77 per million British thermal unit for 15 years beginning 2005 but mid-way decided to hike rates to USD 3 per mmBtu from January 1, 2012 citing firming up of prices in global market.

"Oman has agreed to cut the price to USD 1.5 per mmBtu from January 1, 2012 and under the new mechanism the rate would be USD 1.5 per mmBtu from January 1, 2012, and then the price would be increased by USD 0.5 per year till it reaches USD 3 per mmBtu," sources said.

Fertiliser Ministry has also proposed to the Cabinet to accept the price increase by Oman as it is much lower than the global rates of natural gas.

"We have sent a proposal to the Cabinet that the hike in gas price be accepted," a senior Fertiliser Ministry official had said.

The Ministry argues that even at USD 3 per mmBtu, the gas supplied by Oman is cheaper than alternative fuel sources. Long term gas supplies in the international market are no less than USD 18 per mmBtu.

The official said Cabinet, which may consider the proposal as early as this week, would decide if India should drag Oman to arbitration for breach of signed gas supply contract.

The ministry believes that Oman may snap gas supplies to the plant once arbitration is initiated the OMIFCO would have to buy fuel from international market during pendency of the suit. IFFCO and KRIBHCO holds a stake of 25 per cent each in OMIFCO, while the rest is with Oman Oil Company.

"We are against the proposal of taking the matter to the International Arbitration Tribunal in London, as this could lead to disruption of supply from Oman," the official said.

OMIFCO ships around two million tonnes of urea, which is its entire production, to India under an agreement the country has with the Oman government.

The Indians initially choked, so the Omanis gave them a special discount for a couple of years, while still immediately doubling the price.

Ouch!

I wonder why the Indians didn't get the contract entered as a Royal Decree, which would make it more difficult to renege upon.

It's also a bit sad the way the Indian press headlines the article as a victory for India (Gas Price halves!). They are getting screwed.


Meh. Yanni. Whallah. What to do? We have no gas! Sorry.


If I were some of the other big industrial gas users: Vail [steel plant - needs lotsa gas], or The Wizard of Oz [2 Methanol plants - needs lotsa clean gas], or Alcoa [Aluminium plant - lotsa gas!], I'd be pretty damn nervous right now. Maybe time to do some lobbying and hire some lawyers.


Is this the start of a resource nationalism trend by stealth? Is the Government's policy to negotiate long term contracts in bad faith?





It does not encourage Foreign investors to bring the capital and expertise into Oman, when the agreed and signed legal, fiscal and contractual terms are held at the whim of the Government.

The business environment is bad enough. Oman's courts are already a minefield for outsiders. Employment law is a micro-managing mess biased toward the Oligarchs. Education is poor. And wasta is a huge tax on SMEs. Infrastructure isn't everything.

Is this what happen's when HM goes on vacation?