News / Economy

Central Bank: Lost Oil Revenues Cost Libya $30B

Pipelines are seen at the Zueitina oil terminal in Zueitina, west of Benghazi April 7, 2014. Pipelines are seen at the Zueitina oil terminal in Zueitina, west of Benghazi April 7, 2014.
x
Pipelines are seen at the Zueitina oil terminal in Zueitina, west of Benghazi April 7, 2014.
Pipelines are seen at the Zueitina oil terminal in Zueitina, west of Benghazi April 7, 2014.
Reuters
— Libya has lost $30 billion due to 10 months of protests at oilfields and export terminals but has sufficient foreign currency reserves to keep the country running, a central bank official said.

A wave of protests at oil facilities has reduced the North African country's oil output to less than 200,000 barrels a day down from 1.4 million bpd in July before the strikes started.

The protests are part of wider turmoil in the North African country since the overthrow of Moammar Gadhafi in 2011. The government is unable to control militias and armed tribesmen who helped oust Gadhafi but now seize oilfields or state institutions at will to make political or financial demands.

“The damages the state has now suffered after more than 10 months, Libya has lost not less than $30 billion,” Musbah Alkari, director of the central bank's reserves department, told Reuters. Reserves are currently around $110 billion, down from around $130 billion last summer when protests started.

The situation could get worse in the next few days.

State oil firm National Oil Corp (NOC) said on Wednesday that it might be forced to use crude from its two offshore oilfields, so far unaffected by protests, to feed a domestic refinery. That could mean Libya stops exporting oil for the first time since 2011.

Alkari said Libya was currently earning around $1 billion each month in oil revenues, having brought in between $4 billion and $5 billion a month before the oil protests started.

Oil and gas exports are the only source of revenue for the country's $50 billion budget and to fund food purchases and other imports worth $30 billion, as Libya has no sizeable industrial production outside the oil sector.

“The reserves will [cover the budget and imports] for three and a half years ... [but] we want suitable solutions for these problems,” he said.

Alkari said there needed to be a political solution for the oil crisis but did not elaborate.

A rebel group in eastern Libya has seized several oil export ports to press for financial demands and regional autonomy.

The government signed an agreement in April with the rebels to reopen the ports but implementation has been slow due to mutual distrust. The rebels have refused to deal with the new premier Ahmed Maiteeq who was elected by parliament in a chaotic vote disputed by some lawmakers.

Alkari said the central bank had diversified its foreign currency reserves, which are split between cash, short-term deposits, foreign bonds and equity stakes in banks and insurers.

Discussing the bank's little-known investment strategy, he said it favored dollar bonds such as U.S. Treasuries as its oil is sold in dollars. It also holds sovereign or other highly rated bonds from European countries and stakes in companies including Italy's UniCredit, a Gulf lender and insurers.

“We have a good mix geographically and in terms of risks,” Alkari said. The bank still buys overseas assets sometimes “but less than before.”

“We receive $1 billion [a month] in this hand, but in the other hand we pay $3.6 billion so how can we invest new money?” Alkari said.

You May Like

Video On the Scene: In Gaza, Darkness Brings Dread and Death

Palestinians fear nighttime raids, many feel abandoned by outside world, VOA's Scott Bobb reports More

African Small Farmers Could Be Key to Ending Food Insecurity

Experts say providing access to microloans, crop insurance, better storage facilities, irrigation, road systems and market information could enable greater production More

University of Michigan Wins Solar Car Race

Squad guided its student-designed solar-powered vehicle to fifth consecutive time victory in eight-day bi-annual American Solar Challenge More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Gazans in Shelled School Sought Shelteri
X
Scott Bobb
July 30, 2014 8:16 PM
Israel's air and ground assault against Hamas-led fighters in Gaza has forced many Palestinians to flee their homes, seeking safety. But safe places are hard to find, as VOA’s Scott Bobb reports from Jabaliya.
Video

Video Gazans in Shelled School Sought Shelter

Israel's air and ground assault against Hamas-led fighters in Gaza has forced many Palestinians to flee their homes, seeking safety. But safe places are hard to find, as VOA’s Scott Bobb reports from Jabaliya.
Video

Video Rapid Spread of Ebola in West Africa Prompts Global Alert

Across West Africa, health officials are struggling to keep up with what the World Health Organization describes as the worst ebola outbreak on record. The virus has killed hundreds of people this year. U.S. President Barack Obama and other world leaders are watching the developments closely as they weigh what actions, if any, are needed to help contain the disease.
Video

Video Michelle Obama: Young Africans Need to Embrace Women's Rights

U.S. first lady Michelle Obama urged some of Africa's best and brightest to advocate for women's rights in their home countries. As VOA's Pam Dockins explains, Obama spoke to some 500 participants of the Young African Leaders Initiative, a six-week U.S.-based training and development program.
Video

Video Immigrant Influx on Texas Border Heats Up Political Debate

Immigrants from Central America continue to cross the U.S.-Mexico border in south Texas, seeking asylum in the United States, as officials grapple with ways to deal with the problem and provide shelter for thousands of minors among the illegal border crossers. As VOA's Greg Flakus reports from Houston, the issue is complicated by internal U.S. politics and U.S. relations with the troubled nations that immigrants are fleeing.
Video

Video Study: Latino Students Most Segregated in California

Even though legal school segregation ended in the United States 60 years ago, one study finds segregation still occurs in the U.S. based on income and race. The University of California Los Angeles Civil Rights Project finds that students in California are more segregated by race than ever before, especially Latinos. Elizabeth Lee reports for VOA from Los Angeles.
Video

Video Vietnamese Staging Chinese Product Boycott After Oil Rig Spat

China recently pulled an oil rig from an area of the disputed South China Sea that Vietnam also claims. Despite the action, the incident has had a lingering effect on consumers in Vietnam. VOA's Reasey Poch reports from Hanoi on an effort to boycott Chinese products.
Video

Video A Summer Camp for All the World

VIDEO: During workshops and social gatherings, the Global Youth Village summer camp encourages young people to cooperate and embrace their differences, while learning to communicate with people from other countries. VOA's Deborah Block has more.
Video

Video From Cantankerous Warlock to Incorruptible Priest, 'Harry Potter' Actor Embraces Diverse Roles

He’s perhaps best known as Mad Eye Moody, the whimsical wizard in the Harry Potter franchise. But character actor Brendan Gleeson's resume includes dozens of films, and he embraces all the characters he inhabits with equal passion. In an interview with VOA’s Penelope Poulou, Gleeson discussed his new drama "Calvary" and his secret to success.

AppleAndroid

World Currencies

EUR
USD
0.7305
JPY
USD
101.53
GBP
USD
0.5830
CAD
USD
1.0656
INR
USD
60.075

Rates may not be current.