A Yugansneftegaz employee turns off a valve at an oil well in western Siberia. (AFP File Photo)

MOSCOW, Dec. 19--Russia on Sunday was to strip crippled Yukos oil giant of its core production asset in a controversial auction expected to be won by state gas behemoth Gazprom, marking the biggest renationalization since the Soviet era, AFP reported.
Defying an 11th-hour US legal order barring the sale and Gazprom's bid, the Russian government at 4:00 pm was to sell off Yukos' crown jewel Siberian oil-pumping subsidiary, Yuganskneftegaz, for an estimated $9 billion.
The forced sale represents a death blow for Yukos, whose ambitious billionaire founder Mikhail Khodorkovsky has slowly seen his company destroyed after he was arrested to face trial on fraud and tax evasion charges in October 2003.
It also puts a large slice of the energy industry back in government hands. By buying Yugansk, Gazprom overnight will be acquiring reserves of 11.63 billion barrels of oil, or 17 percent of Russia's total.
The world's largest gas producer, Gazprom is also merging with state oil firm Rosneft, and the combined entity will account for a fifth of Russian oil output and nearly all its gas production, making it the biggest global energy group.
In a last-ditch attempt to derail the auction, Yukos obtained a court order in Texas, Houston, on Thursday barring the sale for 10 days and granting Russia's number one oil firm bankruptcy protection. But Russian officials dismissed the US ruling and forged ahead with the sale.
"The company has debts towards Russia and Russia has the right to take everything it is owed," the head of the Federal Energy Agency, Sergei Oganesyan, told the official Rossiskaya Gazeta daily's Saturday edition.
Nevertheless, Gazprom filed a last-minute appeal Saturday to lift the temporary restraining order which specifically barred it from participating in the auction.
But Judge Nancy Atlas of the US District Court in Houston, Texas late Saturday rejected the appeal.
Yukos, the top Russian oil producer, has been slapped with gargantuan tax bills of $27.5 billion (20.7 billion euros)--equivalent to the company's entire oil sales for 2002 and the first nine months of 2003.
To pay off the tax claims, which Yukos says are politically motivated, 76.79 percent of Yugansk is being auctioned off for a starting price of $8.65 billion --half what the company is worth according to independent valuations.

BERLIN, Dec. 19--German Finance Minister Hans Eichel has called on the German Central bank to sell 120 tons of gold this year to plug the 2005 federal budget deficit, AFP quoted a media report as saying on Saturday.
The Bundesbank has "the right to sell 120 tons of gold, which would bring in about eight billion euros ($10.6 billion)," said Eichel, quoted by German Sunday newspaper Bild an Sonntag. "We should think about it. Gold does not earn interest, but the money obtained from its sale certainly does," he said.
Eichel said he did not however want to lean on Bundesbank President Axel Weber to dip into the bank's large gold reserves.
"Nobody is putting pressure on anyone. It is a decision entirely for the Bundesbank," the minister said, adding that he was waiting with interest to see how the bank would react to the suggestion.
In Germany only the central bank can decide to sell off gold. But current legislation, which the bank would like modified, dictates that profits from the sale, which in this case would be considerable, go the federal budget.
Debate has been underway in Germany for the past several months about selling off part of the bank's gold reserves in order to finance education and research projects.
The head of the Bundesbank said on Dec. 7 that a decision on any sale would be announced before the end of the year.
Germany has the second largest reserves of gold in the world--3,400 tons--behind the United States.

GENEVA, Dec. 19--The world's major airlines could save billions of dollars if they follow the advice offered by the top industry body this week on how to cut fuel consumption and costs linked to delivering tickets, AFP reported.
"Fuel is the enemy this year that will steal our return to profitability," the International Air Transport Association's (IATA) director general Giovanni Bisignani told reporters.
As the price of a barrel of oil soared above $40 this year, the combined fuel bill for the top carriers climbed to $62 billion (47 billion euros)--about $15 billion more than in 2003, IATA said.
As a result, the companies are due to suffer losses of about $4.8 billion in 2004, despite a 14 percent rise in passenger volume.
IATA, however, hopes that its members will return to profit in the coming 12 months provided that the price of oil falls to $36 a barrel.
Airliners have already managed to save $1.1 billion this year by negotiating with governments, notably in Iraq, China and Mexico, to make flights more direct to reduce the duration of the journey.
IATA companies, which exclude low cost fliers such as Easyjet and Ryanair, would save a total $2.7 billion a year for every one minute that is cut off the length of a route, according to IATA.
Carriers should also better calculate the amount of fuel needed for each voyage. If an airplane carries a superfluous five tons of oil between Frankfurt and New York it would eat up an extra 1.3 tons of oil, said IATA's vice-president Guenther Matschnigg. In addition, if a plane is washed regularly it reduces air friction, which in turn saves 12 tons of oil per year, per aircraft, he said.
Confronted with stiff competition from the low price carriers, which sell tickets directly over the Internet, IATA also suggested making electronic tickets the norm instead of traditional hard copies. At present, 17 percent of tickets sold by IATA companies are electronic, but the industry body wants this ratio to rise to 40 percent by next year and 100 percent by 2007.
Another cost saver is the "self-service" check-in, which has already begun to pop up in airports such as Amsterdam and reduces passenger expenses by $3.5 per person.

Pakistan relies on textiles for about 67 percent of its total exports.

KARACHI, Pakistan, Dec. 19--Pakistan's vital textile industry could suffer from the imminent end of import quotas as international rivals seek to exploit the country's widespread disregard for labor and environment laws, analysts say, AFP reported.
Quotas on textiles, the mainstay of Pakistan's 12-billion-dollar exports, finish at the end of the year under a 1994 agreement. They ensured that developing countries had access to the key European Union and US markets.
But while industry figures expect Pakistan to see some benefits from free trade, they say strict World Trade Organization laws starting in 2006 could allow China and India to cause a fuss about Pakistani working practices.
"We are faced with a make-or-break situation in the next couple of years," said leading exporter Anjum Salim, who is the former chairman of the All Pakistan Textile Mills Association.
China is expected to be the main winner from the disappearance of quotas. India and Pakistan also stand to benefit because of their large domestic markets, Jean-Paul Sajhau, head of textiles and clothing at the International Labor Organization, said recently.
However Pakistan--which relies on textiles for about 67 percent of its total exports or over 11 percent of the Gross Domestic Product--could face a rockier road, according to insiders.
With the end of the 30-year quota regime, cut-throat competition would induce every stakeholder to take advantage of the weaknesses of its rivals," said Faisal Shaji, textile analyst at First Capital Equities. "Pakistan's traditional business rivals like India or other textile exporting countries could lodge complaints against Pakistan over its violative textile manufacturing practices with regard to labor, environmental or other laws," he said.
In the short term, Pakistani exporters of ready-made textiles are counting on gains. "We see a jump of 15 to 20 percent in our garment exports after the tariff barriers are done away with," said Dawood Usman Jakhora, chairman of the Pakistan Ready-made Garment Manufacturers Association. Such garments account for over one billion of the total eight-billion-dollar textile exports.
But many smaller textile mills, which make up the majority of Pakistan's exports, do not comply with international environment and labor laws and could face a setback after 2006, exporter Salim said.

An employee of Japan's Sharp Corporation shows off its new LDC 17-inch monitors for personal computers. (AFP File Photo)

TOKYO, Dec. 19--Japan's Sharp plans to spend up to $1.9 billion to build a new plant in central Japan to produce liquid crystal display (LCD) panels to compete with South Korean manufacturers, a report said Sunday, AFP reported.
Sharp, which ranks third in the global LCD market after two major South Korean makers, LG Philips LCD and Samsung Electronics, plans to improve its cost competitiveness with the new plant, the Nihon Keizai Shimbun said.
Investment will likely be 150-200 billion yen (1.4-1.9 billion dollars), the economic daily said, without naming sources.
The factory will be built next to an existing LCD panel plant in Kameyama, 300 kilometers west of Tokyo, to go operational in late 2006, it said.
The LCDs to be produced would be equal to those of the seventh-generation models planned by the South Korean makers or even the higher eighth-generation ones, it said. No immediate comment was available from Sharp.

DUBAI, UAE, Dec. 19--The Persian Gulf Arab monarchies are expecting a windfall this year thanks to high oil revenue, but the region's economies are pushed to absorb the abundant liquidity given the limited investment opportunities.
"It's an exceptional year for all the (Persian) Gulf Cooperation Council states which have earned a budget surplus," after predicting deficits, Jassim al-Saadun, head of Kuwait's Al-Shall Economic Consultants, told AFP.
Oil revenues of the (P)GCC, which groups Saudi Arabia, Kuwait, Bahrain, Qatar, Oman and the United Arab Emirates (UAE), grew some 35 percent this year thanks to a 25 percent rise in record crude prices and a 10 to 15 percent increase in production, said Saadun.
The (P)GCC states, whose economies depend largely on oil revenue, this year produced to maximum capacity of an average 15.5 million barrels per day, against 15 million bpd last year and 13.3 million bpd in 2002, Al-Shall said in a report.
As a result, the total gross domestic product of the six states, which have a combined population of 35.8 million, the majority expatriate, should reach $421.5 billion, up 9.4 percent on 2003, the report said.
Cash flows within the region, which have already increased since the September 11, 2001 attacks, are set to grow further this year with Persian Gulf Arab investors pouring liquidity from soaring oil prices into equities.
In the UAE, for example, initial public offerings of Amlak Finance, Finance House and Arabian Technical Construction were oversubscribed 33, 78 and 64 times, respectively.
In Saudi Arabia, the Sahara Petrochemical Company's IPO was over-subscribed 22 times. Etihad Etisalat Consortium, the second mobile phone operator in the kingdom, raised $267 million after recently floating 20 percent of its stock.
Early 2005 will see the partial sale of Kuwait Finance House, the main Islamic bank in the oil-rich emirate, totaling $1 billion. Also expected is a 400-million-dollar IPO by Saudi Arabia's Al-Bilad Bank.
This is testament to the limits of the investment market in the Persian Gulf states, which have assets abroad estimated at $740 billion, according to Saadun.
"Money exists but the problem is to find real opportunities for investment and the repatriation of funds abroad," he added.

NEW DELHI, India, Dec. 19--Malaysian Prime Minister Abdullah Ahmad Badawi arrives in India on Sunday for a five-day visit during which Kuala Lumpur hopes to bag a large chunk of construction contracts in Asia's fourth-largest economy.
Badawi, who is accompanied by a large business delegation, is also expected to push New Delhi to lower palm oil duties, officials and analysts said. India is one of the largest importers of Malaysian palm oil.
"India and Malaysia share historical and cultural links. Today, Malaysia is India's largest trading partner among ASEAN countries, with bilateral trade recording $3.2 billion and projected to cross $4 billion this year," the Indian Foreign Ministry said ahead of his arrival.
"Malaysian companies play an active role in infrastructure development in India including in the construction of highways and ports. Similarly, Indian companies ... have been engaged in the Malaysian industrial sector since the 1970s," it said.
India, the world's biggest edible oils importer, is likely to increase purchases as it needs more supply to cover increased consumption and a delay in arrivals of domestic oil in the market, traders said.
It imports 50 percent of its annual edible oil requirement of nearly 9 million tons, the bulk of which is palm oil from Malaysia and Indonesia.
Abdullah is due to meet Prime Minister Manmohan Singh and other Indian leaders, and to hold talks with business chiefs to boost bilateral trade. The current trade balance is firmly in Malaysia's favor.
New Delhi was expected to urge Malaysia to use its influence and help create an Asian free trade market with ASEAN countries by 2015, a trade official said.
Malaysian firms have bagged contracts worth more than $2 billion for road construction in India, including a role in an ambitious highway program connecting the four corners of the vast South Asian country.
India plans to encourage private investment in the shipping and port sectors and help scrap old procedures that hinder growth in maritime-related areas as part of a 14-year-old economic reform program.
So far, 17 port projects costing 40.5 billion rupees have already been approved, while 19 more involving 34.8 billion rupees are under consideration or open for bids.