Turkey says may begin oil exploration under Libya deal in 3-4 months

Donmez said Turkish Petroleum (TPAO) would begin operations in areas under its license after the process was completed. (File/AFP)
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Updated 29 May 2020

Turkey says may begin oil exploration under Libya deal in 3-4 months

  • Donmez said Turkish Petroleum (TPAO) would begin operations in areas under its license after the process was completed
  • Turkey could face possible EU sanctions over its operations

ANKARA: Turkey may begin oil exploration in the eastern Mediterranean within three or four months under a deal it signed with Libya that was condemned by others in the region including Greece, Energy Minister Fatih Donmez said on Friday.
Libya’s internationally-recognized Government of National Accord (GNA) signed the maritime delimitation deal last year. Turkey says it creates an exclusive economic zone from its southern coast to Libya’s northeast coast, and protects rights to resources.
Greece, Cyprus and others oppose the accord and call it illegal, an accusation Ankara has rejected. The European Union also opposes the maritime deal that was signed alongside an agreement for Turkey to provide military support to the GNA, which has battled forces based in eastern Libya for more than a year.
Speaking at a ceremony to mark the launch of Turkey’s Fatih oil-and-gas drilling ship to the Black Sea, Donmez said Turkish Petroleum (TPAO), which had applied for an exploration permit in the eastern Mediterranean, would begin operations in areas under its license after the process was completed.
“Within the framework of the agreement we reached with Libya we will be able to start our oil exploration operations there within three to four months,” Donmez said. Turkey’s new Kanuni drill ship would also go to the Mediterranean later this year, he added.
The move could further stoke tensions in the region, where Turkey has been at loggerheads for years with Greece, Cyprus, Egypt and Israel over ownership of natural resources. Turkey could also face possible EU sanctions over its operations.
Separately, Donmez said the Fatih drill ship would hold its first operation in the Black Sea on July 15, the anniversary of a 2016 failed coup attempt. Friday also marked the anniversary of Istanbul’s conquest by the Ottoman Empire in 1453.


Israel cenbank’s Abir says buying corporate bonds to prevent layoffs

Updated 48 min 49 sec ago

Israel cenbank’s Abir says buying corporate bonds to prevent layoffs

JERUSALEM: The Bank of Israel’s decision to start buying corporate bonds should enable companies to issue debt and prevent further layoffs as a result of the coronavirus pandemic, deputy governor Andrew Abir said.
On Monday, the bank held its benchmark interest rate at 0.1 percent but said it would buy 15 billion shekels ($4 billion) of higher-rated corporate bonds in the secondary market.
“It’s not that the corporate bond market was not functioning or because spreads have widened dramatically, but rather the understanding that over the next 6-12 months, there’s going to be a need for issuance in that market,” Abir told Reuters.
The central bank began purchases on March 15 of up to 50 billion shekels of government bonds, which has helped reverse a spike in government and corporate yields.
The index of bonds issued by Israel’s 20 largest firms has gained 1.4 percent following the central bank’s announcement, following three weeks of declines.
Noting that more than 40 percent of corporate credit comes from the bond market, Abir said that fear of being frozen out the market could lead to cash hoarding and cost-cutting, including jobs.
“We want to prevent a situation where a company is having question marks in its ability to fund themselves (and) lays off another 1,000 workers.”
Unemployment is already more than 20 percent and could worsen after some COVID-19 restrictions were reimposed.
Abir said risks to the central bank’s scenario of a record six percent economic contraction in 2020 will be “to the downside” if the infection rate stays high.
Analysts are split over whether the central bank will lower its key rate to zero percent or negative. The Bank of Israel has indicated it is reluctant to do so.
“We still have more measures that we can do. QE can be increased. We haven’t run out of our policy options,” Abir said.