Libya’s Oil Revenue Set to Drop This Year as Conflict Hurts Output
Libya’s Oil Revenue Set to Drop This Year as Conflict Hurts Output
(Bloomberg) -- Libyan oil revenues are expected to drop by as much as 17% in 2019 as a result of disruptions in production stemming from the country’s crippling political and security crisis, the Tripoli-based central bank governor said.
Receipts will drop to $20 billion or $21 billion this year from around $24 billion, Sadiq Al-Kabir said in an interview with Bloomberg Television in London. The decline bodes ill for the OPEC member that’s been largely unable to wrench free from the chaos unleashed by the 2011 ouster and killing of Moammar al-Qaddafi.
That fight has pit the internationally-recognized government in the west against eastern-based commander Khalifa Haftar, who launched an offensive on the capital after securing control of the east and south of the country and most oil facilities. Further complicating the political landscape are rival central banks in the west and east, as well as parallel National Oil Corporations.
Touching on those challenges, Al-Kabir said that authorities, with the blessing of the government in Tripoli, had decided against devaluing the dinar amid a thriving black market where the currency traded at just 14% of its official price against the U.S. dollar.
Instead, officials agreed to impose fees that “helped reduce the black market value from as much as 10 dinars per dollar to less than 4.4 dinars,” he said. Dollars are now available at the rate of 3.9 dinars, while the official price is 1.4 dinars to the dollar.
Al-Kabir’s projection for the decline in oil revenues comes just days after the state-run National Oil Corp. in Tripoli lifted force majeure on exports from the Zawiya port that stemmed from a two-day disruption in production in the Sharara field. An estimated 290,000 barrels per day in output were lost.
To contact the reporters on this story: Annmarie Hordern in London at ahordern1@bloomberg.net;Salma El Wardany in Cairo at selwardany@bloomberg.net
To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, Tarek El-Tablawy
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