Lebanon currency reaches new low as crisis deepens
Iraq oil minister says gas sector a priority for country Country suffers severe shortages of vital products
BEIRUT, June 14, (AP): Lebanon’s currency hit a new low on Sunday, as the country’s economic and political crisis worsened with no apparent solutions in the near future.
The currency has lost more than 90% of its value since October 2019, when anti-government protests erupted. Inflation and prices of basic goods have skyrocketed in the country, which imports more than 80% of its basic goods.
The US dollar hit 15,300 Lebanese pounds on the black market, a level not seen since March. The official rate still stands at 1,515 pounds to the dollar.
The latest crash comes as the tiny country suffers severe shortages of vital products including fuel and medicine. Electricity cuts last for much of the day and private generator owners have warned they cannot cover the supply deficit of the stateowned power company.
Political disagreements between President Michel Aoun and Prime Minister-designate Saad Hariri have delayed the formation of a new government. Hariri was chosen for the post in October.
The government of Prime Minister Hassan Diab resigned days after an Aug. 4 blast at Beirut’s port that killed 211, wounded more than 6,000 and damaged nearby neighborhoods.
In March 2020, Lebanon defaulted
on paying back its debt for the first time in its history.
The crisis is rooted in decades of corruption and mismanagement by
the ruling class that has been running Lebanon since 1990 when a 15-year civil war ended.
The World Bank said earlier this
month that Lebanon’s economic and financial crisis is likely to rank as one of the worst the world has seen in more than 150 years.
BAGHDAD, June 14, (AP): Iraq’s oil sector is rebounding after a catastrophic year triggered by the coronavirus pandemic, with key investment projects on the horizon, Iraq’s oil minister said Friday. But he also warned that an enduring bureaucratic culture of fear threatens to stand in the way.
Iraq is currently trading oil at $68 per barrel, close to the approximately $76 needed for the state to operate without reliance on the central bank to meet government expenditures.
Oil Minister Ihsan Abdul-Jabbar Ismail took over the unenviable job of supervising Iraq’s most vital industry at the height of an oil price crash that slashed oil revenues by more than half last year. Since then, he has had to balance domestic demands for more revenue to fund state coffers and pressure from OPEC to keep exports low to stabilize the global oil market.
With the sector rebounding, Ismail told The Associated Press, he can now focus on other priorities. In the interview, he offered a rare glimpse into the inner-workings of the country’s most significant ministry - Iraq’s oil industry is responsible for 90% of state revenues.
He said cutthroat Iraqi politics and corruption fears often derailed critical investment projects during his tenure and those of his predecessors - a source of long-term frustration for international companies working in Iraq.
“In the Ministry of Oil, the big mistake, the big challenge are the delays in decision-making or no decision-making at all,” he said, attributing indecisiveness to fears of political reprisal from groups or powerful lawmakers whose interests are not served.
He described what he said was a warped work culture where allegations of corruption are used as tools by political players to get their way. He alleged that the mere possibility is often enough to keep high-ranking officials in ministry from signing off on important projects.
“This is the culture: To stay away from any case, to stay away from inspectors, to say ‘let us not do it,’” he added. “I think this is the corruption that slows the economy.”
He said that during his time as minister he has sought to fast-track projects, he said.
Top on his list is developing the country’s gas sector, a central condition
for Iraq to be eligible for U.S. sanction waivers enabling energy imports from neighboring Iran. To that end, Iraq is looking to develop longneglected gas fields and capture gas flared from oil sites.
Ismail said he is hopeful contracts will be signed within the coming months to develop key projects that could boost Iraq’s gas capacity by 3 billion cubic standard feet by 2025. But that all depends on closing the deal with oil companies; lucrative contract negotiations in Iraq have a history of stalling once commercial terms are laid out.
Iraq currently imports 2 billion standard cubic feet to meet domestic needs.
The ministry is close to signing with China’s Sinopec to develop Mansuriya gas field in Diyala province, said Ismail. The field could add 300 million standard cubic feet of gas to domestic production. He hopes to finalize the deal by mid-July.
The ministry is also in talks with France’s Total to develop an ambitious multi-billion dollar mega investment project in southern Iraq, including the Ratawi gas hub, development of Ratawi oil field and a scheme to provide water to oil fields required to boost production.
Early talks are also ongoing to develop Akkas gas field in Anbar province, with the American Schlumberger and Saudi Arabia’s oil giant Aramco, he said, expressing hopes for an agreement there too.
Though negotiations with international companies have picked up speed, Ismail said entrenched indecision within his ministry persists. Investors have blamed glacial bureaucracy and indecision within ministry ranks for thwarting projects.