Libya urges against escalation at El Sharara oilfield

The main production area at Libya’s El Sharara oilfield is still being held by armed tribesmen. (Reuters)
Updated 09 February 2019

Libya urges against escalation at El Sharara oilfield

  • Main production area at El Sharara still held by armed tribesmen
  • Libya’s National Oil Corp. says it will not resume normal operations until security has been restored

BENGHAZI/LONDON: Libya’s National Oil Corp. on Friday urged all parties to avoid escalation at the El Sharara oilfield, the country’s largest, and said it would not resume normal operations until security had been restored.
“Worker safety remains our primary concern,” NOC Chairman Mustafa Sanalla said in a statement. “We urge all parties to avoid conflict and the politicization of key infrastructure.”
The eastern-based Libyan National Army said on Wednesday it had seized the 315,000-barrel-per-day (bpd) southwestern field from tribesmen and protesters who forced operations to halt when they took the site on Dec. 8.
But an engineer at the field told Reuters that eastern forces were controlling only a pumping substation and that the main production area was still held by armed tribesmen.

 

 The field manager had communicated with all parties in the vicinity of the site and urged restraint, the NOC said.
In a statement, the LNA said any plane planning to take off or land in any airport in the south from midnight on Thursday would require approval from the air force operations room. It said this would apply to local or foreign flights, adding it would treat any aircraft contravening those orders as an enemy target.
This effectively means the NOC would be unable to fly to El Sharara without permission from Haftar’s forces.
Oil production in Libya, a member of the Organization of the Petroleum Exporting Countries, has been disrupted since conflict broke out in 2011, with protesters and armed groups often targeting oilfields and energy infrastructure.
National production now stands at under 1 million bpd, well below pre-2011 capacity of 1.6 million bpd.

FASTFACTS

Libya is losing $30 million a day due to the closure of the El Sharara oil field, the head of the United Nations Support Mission in Libya said Thursday. The Libyan National Army (LNA), based in the east of the politically divided country, said earlier that it had seized the El Sharara field from tribesmen and protesters who forced operations to halt when they took the site on Dec. 8. The main production area is still occupied by armed tribesmen, a field engineer told Reuters on Thursday.


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.