Share

Lost oil revenues have cost Libya $30bn

Tripoli - Libya has lost $30bn 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 Muammar Gaddafi in 2011. The government is unable to control militias and armed tribesmen who helped oust Gaddafi 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 $30bn," Musbah Alkari, director of the central bank's reserves department, told Reuters.

Reserves are currently around $110bn, down from around $130bn 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 $1bn each month in oil revenues, having brought in between $4bn and $5bn a month before the oil protests started.

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

"The reserves will last (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 favoured dollar bonds such as US 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 $1bn (a month) in this hand, but in the other hand we pay $3.6bn so how can we invest new money?" Alkari said.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.91
+0.1%
Rand - Pound
23.87
+0.1%
Rand - Euro
20.37
+0.3%
Rand - Aus dollar
12.31
+0.2%
Rand - Yen
0.12
+0.2%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders