Page 11 - DMEA Week 01

DMEA REFINING DMEA
Libyan refinery put at risk of shutdown after missile attack
LIBYA
The refinery is Libya’s largest still functioning.
LIBYA’S largest functioning oil refinery was put under threat of closure in late December after a nearby airstrike, as the country’s civil war intensifies.
The Libyan National Oil Corp. (NOC) warned on December 28 it might have to evac- uate staff from the plant at the western Zawiya port after a missile landed just west of the facility near a storage warehouse. There were no casual- ties or damage, NOC said.
Libya’s UN-backed government, based in Tripoli some 40 km east of Zawiya, accused the rebel Libyan National Army (LNA) led by Khal- ifa Haftar of intentionally targeting the 120,000 barrels per day refinery, which supplies fuel to the war-torn country’s western and southern regions.
The government now looks in danger of being overrun, after recently ceding strategic coastal territories to Haftar’s forces. The LNA have been trying to take the capital since April.
NOC added there was a risk that the El Shar- ara oilfield, whose crude is exported via Zawiya, might also be shut down, as well as the port itself.
“Halting operations at Zawiya will reduce Libyan oil production by at least 300,000 barrels a day and will mean it might not be possible for fuel to be refined at the Zawiya refinery,” the company said. “This fuel will need to be imported instead, which will lead to losses in the hundreds of millions of dol- lars at a time when the Libyan economy is suffering.”
As of press time the refinery has continued operating. In addition to a 300,000 bpd export terminal, the Zawiya port also hosts the Mallitah gas condensate terminal.
Russia, which allegedly backs the LNA, and Turkey, who sides with the Libyan government, have called for a ceasefire to come into force on January 12. But forces loyal to Kaftar have already said they will continue fighting regardless.
Turkey this month dispatched troops to the North African state, not to engage the rebels but to enforce a peace, according to Ankara. The Turkish government has accused Russia of hav- ing around 2,500 mercenaries in Libya support- ing the LNA. ™
Sudan backtracks on plan to end fuel subsidies
SUDAN
Sudan has to get a grip on its finances, but ending subsdies could spark widespread social tensions.
SUDAN’S transitional government has delayed a plan to scrap fuel subsidies, fearing the public reaction to the move.
Finance Minister Ibrahim Elbadawi said on December 27 that the subsidies would be lifted gradually, starting in Sudan’s 2020 budget. But the government then backtracked after meeting the following day with the opposition durig the rule of ex-president Omal al-Bashir, who was ousted by the military in April.
No action will be taken until a conference in March in which economic reforms will be dis- cussed, Information Minister Faisal Saleh told Reuters after the meeting.
“In light of the decisions of this conference will be determined the economic policies of the country, including policies regarding commod- ity subsidies,” he said.
Sudan’s new leadership faces no small task of turning the economy around after decades of mismanagement under the rule of Bashir and the lasting impact of the loss of most of its oil wealth after South Sudan’s 2011 secession.
The government has said it needs billions of
dollars in budget support to prevent the econ- omy from collapsing. But it has been unable to tap the International Monetary Fund (IMF), the World Bank and other international financiers for support after its inclusion in the US’ list of state sponsors of terrorism.
The IMF has repeatedly called on Sudan to end the subsidies and float its currency in order to boost growth and investment. But the govern- ment is reluctant to adopt austerity measures too hastily through fear of putting too great a burden on the population and causing a public backlash. Its U-turn came after protestors threatened to return to the streets to protest against the 2020 budget.
Past attempts to lift subsidies have all resulted in widespread social tensions. An attempt in 2013 led to nationwide protests that ended with the killing of more than 200 demonstrators by Bashir’s forces.
When announcing the plan to cut fuel subsi- dies, Elbadawi said public sector salaries would also be doubled to counter the impact of infla- tion. ™
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