Page 11 - MEOG Week 18

MEOG PoLICy MEOG
“the first step on the path to saving lebanon from the deep financial pit”. On Thursday, the Cabinet adopted a long-awaited rescue plan.
France said on Friday that lebanon needed to implement the reforms, describing the rescue plan as essential for the country’s recovery.
“It is on this basis that France stands ready to support the efforts of lebanon,” French foreign ministry spokeswoman Agnes von der Muehll said in a statement.
But the protesters were sceptical. In the south- ern city of Sidon, 19-year-old Omar al-Mughrabi said the country needed radical change – not reform of failing or ineffective policies.
“Going to the IMF is not the solution,” al-Mughrabi said. “We don’t need any more debt than we already have.”
lebanon’s banking association also expressed opposition to the government’s move, say- ing it could in “no way” endorse a rescue plan that would “further destroy confidence” in the country.
lebanon, one of the most indebted nations in the world, defaulted for the first time in March on its sovereign debt. Anti-government protests
that erupted in October subsided during a nationwide lockdown since mid-March to blunt the spread of the coronavirus (COvID-19). lebanon, a country of 5mn people, has reported only 729 cases and 24 deaths, and began to ease some virus restrictions this week.
The lockdown has worsened the recession’s sharp bite, increasing unemployment and popu- lar resentment. In recent days protesters ignored social distancing measures and calls to stay home to rally outside the central bank and private banks, setting off clashes with the security forces and the army. In the northern city of Tripoli, a protester was killed earlier this week.
Prices of basic goods have risen, in some cases by over 60%. The lebanese pound, pegged to the dollar for 30 years, lost nearly 60% of its value.
With a stable national currency, the leb- anese had used their pound and the dollar interchangeably, many keeping their savings in dollars. To deal with a liquidity crunch and a massive imports bill, the central bank decreed that most withdrawals could only be in the local currency. The decision further weakened the pound.™
ProJeCts & ComPanIes
Qatar’s QP to axe jobs, cut costs
qatar
STATE-OWNED Qatar Petroleum (QP) plans to axe jobs and cut spending in response to the collapse in oil and gas demand, sources told Reu- ters told April 30.
In an internal memo, QP CEO Saad al-Kaabi told company employees that the planned staff cuts would be finalised after the Eid-al-Fitr reli- gious holiday for Muslims in late May.
“like all oil and gas companies QP is look- ing at reducing expenditure due to the market downturn which ... will be weak for some time,” a source told Reuters, noting that the cuts would not affect the company’s ambitious energy devel- opment plans.
Qatar, already one of the world’s biggest lNG producers, plans to ramp up its liquefaction capacity to 126mn tonnes per year by 2027, up from 77mn tpy at present. It has postponed the launch of the first phase of its North Field lNG expansion until 2025, Reuters reported in early April, but has no plans to downsize the project’s scope.
The first phase, estimated by Rystad Energy to cost $35bn, will add four more trains to the offshore North field, raising Qatar’s capacity to 110mn tpy. QP began production drilling last
month. The second phase, costing $15bn, will comprise a further two trains.
QP is yet to officially sanction either stage. But bearish market conditions are unlikely to deter the company from moving ahead with the project, which boasts the lowest breakeven costs out of all the major lNG plants due to come on stream in the next decade, Rystad estimates.
The first phase of North Field’s expansion will need a gas price of only $4.5 per mn Btu to break even, according to the Norwegian consultancy, whereas its second will need only $4.1. lNG spot prices are currently at less than half this level, but are expected to pick up from record lows as COvID-19 lockdowns are eased.
QP recently signed a contract with a Chinese shipyard potentially worth over $3bn for con- struction of a new fleet of lNG carriers for the expansion.
The latest spending cuts planned at QP will mark the third wave of restructuring by QP in the last six years. In 2015 the company slashed spending and reduce its workforce in response to the previous market downturn. In 2018 it also merged state-owned lNG producers Qatargas and RasGas to cut costs further.™
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