Libyan oilfield ‘won’t reopen until occupiers leave’

Mustafa Sanalla, NOC chairman, said efforts to restart the field had been complicated by the launch of an international counter-terrorism mission. (Reuters)
Updated 30 January 2019

Libyan oilfield ‘won’t reopen until occupiers leave’

  • El Sharara with a capacity to produce 340,000 barrels per day, has been under force majeure since December
  • Libya’s oil industry has faced disruption since 2011 when the nation plunged into conflict that led to rival power centers in west and east

LONDON: Libya’s biggest oilfield El Sharara will remain shut until an armed group and protesters occupying the site leave, the head of the National Oil Corp. (NOC) said on Tuesday, more than a month after the field was closed because of a protest.
The oilfield, with a capacity to produce 340,000 barrels per day (bpd), has been under force majeure since December. Libya now produces more than 900,000 bpd, below average production in 2018 of 1.1 million bpd, NOC Chairman Mustafa Sanalla said in London.
“The armed group attempting to hold NOC and Libya’s economic recovery to ransom must leave the field before NOC will consider restarting production,” Sanalla told a Chatham House conference.
Libya’s oil industry has faced disruption since 2011 when the nation plunged into conflict that led to rival power centers in west and east. Protesters and armed groups have often targeted oilfields and energy infrastructure.

 

General Khalifa Haftar’s Libyan National Army (LNA), which is based in east Libya, launched a campaign this month in southwest Libya that it says aimed to combat militant groups and secure oil facilities in the area, including El Sharara.
NOC is based in the capital Tripoli, in the west and home to the internationally recognized government.
Referring to the LNA initiative, Sanalla said the effort to restart the field “has been complicated further by the launch of an international counter-terrorism mission which has expanded into an attempt to seize control of territory, including potentially, national oil infrastructure.”
“It is my concern that a sequence of events has been set in motion with unknowable consequences for Libya, and NOC,” he said.
He said the preferred solution for securing the field involved deploying a Petroleum Facilities Guards (PFG) force, managed by NOC. Different factions of the PFG have previously been responsible for shutdowns at oil facilities in the country. He said NOC has suggested that “a mixed force might provide a solution within a negotiated security framework” led by the Government of National Accord in Tripoli and with the support of the UN.

FASTFACTS

Libya’s oil industry has faced disruption since 2011 when the nation plunged into conflict that led to rival power centers in west and east. Protesters and armed groups have often targeted oilfields and energy infrastructure.


Easy credit poses tough challenge for Russian economy minister

Updated 18 August 2019

Easy credit poses tough challenge for Russian economy minister

  • Measures being prepared to help indebted citizens; situation might blow up in 2021

MOSCOW: New machines popping up in Russian shopping centers seem innocuous enough — users insert their passport and receive a small loan in a matter of minutes.

But the devices, which dispense credit in Saint Petersburg malls at a sky-high annual rate of 365 percent, are another sign of a credit boom that has authorities worried.

Russians, who have seen their purchasing power decline in recent years, are borrowing more and more to buy goods or simply to make ends meet.

The level of loans has grown so much in the last 18 months that the economy minister warned it could contribute to another recession.

But it’s a sensitive topic. Limiting credit would deprive households of financing that is sometimes vital, and could hobble already stagnant growth.

The Russian economy was badly hit in 2014 by falling oil prices and Western sanctions over Moscow’s role in Ukraine, and it has yet to fully recover.

“Tightening lending conditions could immediately damage growth,” Natalia Orlova, chief economist at Alfa Bank, told AFP.

“Continuing retail loan growth is currently the main supporting factor,” she noted.

But “the situation could blow up in 2021,” Economy Minister Maxim Oreshkin warned in a recent interview with the Ekho Moskvy radio station.

He said measures were being prepared to help indebted Russians.

According to Oreshkin, consumer credit’s share of household debt increased by 25 percent last year and now represents 1.8 trillion rubles, around $27.5 billion.

For a third of indebted households, he said, credit reimbursement eats up 60 percent of their monthly income, pushing many to take out new loans to repay old ones.

Orlova said other countries in the region, for example in Eastern Europe, had even higher levels of overall consumer debt as a percentage of national output or GDP.

But Russian debt is “not spread equally, it is mainly held by lower income classes,” which are less likely to repay, she said.

The situation has led to friction between the government and the central bank, with ministers like Oreshkin criticizing it for not doing enough to restrict loans.

Meanwhile, economic growth slowed sharply early this year following recoveries in 2017 and 2018, with an increase of just 0.7 percent in the first half of 2019 from the same period a year earlier.

That was far from the 4.0 percent annual target set by President Vladimir Putin — a difficult objective while the country is subject to Western sanctions.

With 19 million people living below the poverty line, Russia is in dire need of development.

“The problem is that people don’t have money,” Andrei Kolesnikov of the Carnegie Center in Moscow wrote recently.

“This is why we can physically feel the trepidation of the financial and economic authorities,” he added. Kolesnikov described the government’s economic policy as something that “essentially boils down to collecting additional cash from the population and spending it on goals indicated by the state.”

At the beginning of his fourth presidential term in 2018, Putin unveiled ambitious “national projects.”

The cost of those projects — which fall into 12 categories that range from health to infrastructure — is estimated at $400 billion by 2024, of which $115 billion is to come from private investment.