Libya’s largest oilfield remains closed

NOC chairman Mustafa Sanalla rebuffed calls by eastern Libyan forces called Libyan National Army, which had taken control of El-Sharara oilfield and declared it secure. (AFP)
Updated 25 February 2019
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Libya’s largest oilfield remains closed

  • The oilfield deep in Libya’s south has been closed since December
  • State guards and tribesmen seized El-Sharara to make financial demands

TRIPOLI: Libya’s El-Sharara oilfield, the country’s biggest, remains closed because an armed group is still there, the chairman of state oil firm NOC said on Sunday.
Mustafa Sanalla rebuffed calls by eastern Libyan forces called Libyan National Army (LNA), which had taken control of the 315,000 barrels a day field and declared it secure.
“The field is closed because of the presence of a group of civilians, this armed militia, and some military people with them,” the NOC chairman said in the video posted online.
The oilfield deep in Libya’s south has been closed since December when state guards and tribesmen seized it to make financial demands, the latest in several such closures over the past few years.
In January, the LNA, which is based in eastern Libya, started an offensive to secure El-Sharara and nearby El-Feel oilfields and fight militants in the south.
In February it sent a force to the field and last week handed control of it to the same oil security force that had been responsible for the closure, after holding negotiations with them over their demands.
The LNA later called on NOC to lift force majeure, a contractual waiver declared in December.
But Sanalla said NOC’s conditions for such a move, including safety for its workers and the departure of the armed group responsible for the field’s closure, had not yet been met.
“The field is not yet safe,” he said.
Sanalla said NOC was in contact with the LNA force, saying the state oil firm was neutral and dealt with all parties in Libya’s conflict, explaining his contact with the LNA.
He referred to the LNA as “army” as it is known in eastern Libya, the power base of its commander Khalia Haftar.
Haftar’s LNA control the east and have started an offensive in southern Libya. It is allied to a parallel government based in the east opposing the UN-backed administration in Tripoli where NOC is based.
The LNA already secures oil ports in eastern Libya and last week also claimed control of the El-Feel oilfield, which produces around 75,000 bpd.


Saudi Arabia’s consumer prices fall in April, fourth month in a row

Updated 41 min 12 sec ago
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Saudi Arabia’s consumer prices fall in April, fourth month in a row

  • Economists still expect deflation in 2019 after prices rose throughout 2018
  • The International Monetary Fund projects GDP growth of 1.9 percent

DUBAI: Saudi Arabian consumer prices fell 1.9 percent year-on-year in April for the fourth month in a row but were unchanged from March, data from the General Authority for Statistics showed.
The annual declines in the consumer price index are partly a consequence of a base effect that raised prices last year after the introduction in January 2018 of a 5% value-added tax (VAT), economists have said.
The annual fall in the CPI index, however, narrowed from March when the index had dropped 2.1 percent. Some economists see the narrowing of deflation as a sign that Saudi Arabia is having some success in boosting its non-oil sector, while global oil prices have remained under pressure in recent years.
“The further easing of deflation in Saudi Arabia in April suggests that stronger activity in the non-oil sector at the start of this year is (finally) feeding through to a pick-up in price pressures,” said Jason Tuvey, senior emerging markets economist at Capital Economics in a note.
Economists still expect deflation in 2019 after prices rose throughout 2018 following the introduction of the VAT, which was imposed to boost non-oil revenue in response to a long-term drop in oil prices.
Capital Economics expect Saudi CPI to fall 1.3 percent in 2019, while Abu Dhabi Commercial Bank’s projects the CPI index to decline 0.9 percent this year.
“The big picture remains that the unwinding impact of tax and administered price hikes implemented in early 2018 has revealed the weakness of underlying inflation in the kingdom,” Tuvey said.
After contracting in 2017, the economy grew 2.2 percent last year, but is forecast to grow more modestly this year.
The International Monetary Fund projects GDP growth of 1.9 percent, buoyed by an expansion of the non-oil economy as the government steps up spending. Y
The central bank chief said in February, when asked if he expected deflation this year, that he expected consumer demand and real estate loans would stave it off.
Credit grew in the first quarter by more than 3 percent, its fastest pace in more than two years, fueled by a jump in mortgages and in loans to small- and medium-sized enterprises.
Tuesday’s data showed the sub-index for housing, water, electricity, gas and fuel prices down 7.8 percent from a year earlier. The sub-index had fallen 8.1 percent in March.
Prices for food and drinks, however, rose 1 percent and prices for education rose 1.3 percent.