Libya’s Arabian Gulf Oil Company halts activities due to fund shortage

People wa;l by buildings destroyed by the war, near the old popular market know as Soukal-Jureif in Libya. (Reuterd)
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Updated 27 August 2021

Libya’s Arabian Gulf Oil Company halts activities due to fund shortage

  • The company has been conducting business without access to the budgets of 2020 and 2021

RIYADH: The Arabian Gulf Oil Company is unable to continue its activity and carry out its work because it does not have the necessary funds, the Libyan state-owned company said on its Facebook account.

The company has been conducting business without access to the budgets of 2020 and 2021 despite repeated promises from the government, the company said.

This has led to the accumulation of debts and obligations and an inability to provide the necessary spare parts, equipment, operating and production requirements, and to pay its workers, the statement said.

The company will be forced to suspend all activities and works unless it is provided with the funds necessary to operate production.

The Arabian Gulf Oil Company is based in Benghazi, Libya, and engages in crude oil and natural gas exploration, production and refining.

Libya needs to increase its oil production by 40 percent to about 1.8 million bpd from 2022 to cover its expenditures and implement economic reforms, Central Bank of Libya Governor Saddek El Kaber said in an interview with Bloomberg on Monday.

Oil is Libya’s only source of income and increased production would ensure $35 billion in revenue next year. The funds will help the war-torn country to carry out development and reconstruction plans, he said.

Libya, with the largest oil reserves in Africa, pumps about 1.3 million barrels of crude per day.


Pakistan, IMF grapple for consensus to unlock critical funding

Updated 06 February 2023

Pakistan, IMF grapple for consensus to unlock critical funding

  • Finance ministry officials say deal expected by Feb. 9
  • Funds are needed to avoid defaulting on external debts

ISLAMABAD: Pakistan and the visiting International Monetary Fund mission are struggling to arrive at a consensus on fiscal adjustment plans, sources said on Monday, in talks aimed at unlocking critical funds needed for the ailing South Asian economy.

The mission has been in Islamabad since Jan. 31 to sort out the differences over fiscal policy that has stalled the release of more than $1 billion from $6.5 billion bailout package signed in 2019.

The IMF funding is crucial for the $350-billion economy facing a balance-of-payments crisis with foreign exchange reserves dipping to less than three weeks of import cover.

The two sides disagree on their data on the fiscal gap, two finance ministry officials with knowledge of the talks told Reuters.

The IMF says the primary deficit is 0.9% of GDP, or around 840 billion Pakistani rupees ($3.06 billion), but according to Islamabad it stands at 0.45%, or around 450 billion rupees ($1.64 billion), said the officials, who declined to be named as the talks were confidential.

"There is a clear difference in data," said one of them. They said Islamabad is expecting a deal by Feb. 9.

Observers say the funds are needed to avoid defaulting on external payment obligations, while the lender's green signal is vital for any other external funding.

The finance ministry and the IMF country representative did not respond to Reuters request for comments.

STUMBLING BLOCK

Pakistan's 2022-23 budget in June estimated the primacy deficit to be 0.2% of GDP and fiscal deficit 4.9% of GDP.

The country has already shifted back to a market-based exchange rate and hiked fuel prices - measures demanded by IMF. But analysts say the steps will increase crippling inflation, which is already up 27.5% year-on-year in January.

The big pile of energy sector debt - over 4 trillion Pakistani rupees ($14.55 billion), including 1.6 trillion in the gas sector- is another stumbling block in the talks, officials said.

They said Pakistan has submitted a plan to cut the debt in phases though price hikes and dividends from gas companies, but the IMF is demanding a clearer path forward.

Over 900 billion rupees in gas sector subsidies for FY2022-23 are also on the chopping block, they said, adding that Pakistan has agreed to withdraw export sector subsidies.

If issues are resolved, Pakistan will introduce a finance bill in parliament to generate revenue, like a one-off flood levy on luxury imports, windfall levy on banks and duties on cigarettes and carbonated drinks, as well as to cut expenditures and development funds.


Pakistan calls for ‘understanding, not more harsh conditionalities’ amid talks to revive stalled IMF bailout

Updated 06 February 2023

Pakistan calls for ‘understanding, not more harsh conditionalities’ amid talks to revive stalled IMF bailout

  • In interview to Arab News, Ahsan Iqbal says Pakistan has strong fundamentals which will never let it go into bankruptcy
  • Pakistan currently seeing a severe dollar crunch and looking for external financing to fulfill its international obligations

ISLAMABAD: The International Monetary Fund (IMF) should realize that Pakistan needs “more understanding, not more harsh conditionalities” after having suffered $30 billion losses due to last year’s flood, its planning minister has said, adding Islamabad is paying an economic cost for a delay in finalization of an IMF review of the country’s $7 billion loan program. 

In addition to the economic losses, the devastating floods claimed more than 1,700 lives and affected 33 million people in the South Asian country, already witnessing decades-high inflation and fast depreciating national currency. 

Amid the economic crisis, Pakistan’s foreign exchange reserves have depleted to $3 billion — barely enough to cover 18 days of imports — leading to fears of a default. 

To mitigate the situation, Islamabad is currently holding talks with an IMF mission, which arrived in the country last month, to discuss the resumption of the $7 billion loan program, stalled since November. 

“The IMF program which should have been finalized earlier has taken a little longer and I hope that IMF also realizes that by delaying the finalization of the program or review of the program, markets get more uncertainty at an economic cost,” Planning Minister Ahsan Iqbal told Arab News in an exclusive interview on Saturday. 

“After Pakistan being subjected to $30 billion loss due to climate change, Pakistan needs more understanding, not more harsh conditionalities.” 

A successful review of the program will result in the release of more than $1 billion to Islamabad, while Iqbal said there was no chance of a default as the South Asian country had strong fundamentals that would never let it go bankrupt. 

“I am very hopeful that the IMF program will be finalized and as soon as the review is finalized, we will see that all the multilateral inflows will start coming in which have been held up due to uncertainty about program,” he said. 

“We should be able to turn around the situation in the next couple of months or maybe a year.” 

Just like climate disaster, the government was facing an economic disaster for no fault of it, but because of “someone else’s wrongdoings,” according to Iqbal. 

The Pakistani planning ministry has worked at the 5E framework which rallies around exports, e-commerce, energy, environment and education. 

“The government is looking at a more comprehensive reform package that will not only fix our immediate problems, but also provide us a solid foundation for sustainable and fast growth in the future,” the minister said. 

On the question of a surge in militant attacks in Pakistan, Iqbal said a small group of militants could not dictate Pakistan and the government had resolved to defeat militants through a comprehensive internal security policy. 

“The national action internal security policy envisages many non-kinetic measures so that we can also make and take more preventive measures in the future for such groups to find no support in the society,” he said. 

“We will continue our vigilance and we will continue our operations to eliminate any trace of these extremist elements which enter Pakistan from Afghanistan.” 

The South Asian country witnessed 254 militant attacks last year, according to the Islamabad-based Pak Institute for Peace Studies think tank, with most of them linked to the Pakistani Taliban, or the Tehreek-e-Taliban Pakistan (TTP), that unilaterally ended a cease-fire with the government in November. Pakistani officials have previously vowed to show no leniency to militants and fight them out. 

On the possibility of talks with former prime minister Imran Khan who has been agitating against the government, Iqbal said the coalition government always asked Khan to hold talks with it and take the path of consensus-building, but unfortunately, he did not do it. 

“He is a lonely voice standing on the one side, the rest of all democratic parties on the other side and they are realizing that,” the minister added. 


Mideast’s share of renewables in energy mix to double by 2030: SAEE chairman

Updated 05 February 2023

Mideast’s share of renewables in energy mix to double by 2030: SAEE chairman

  • Region plays crucial role as it continues supplying hydrocarbons as the world enters a new energy system

RIYADH: Saudi Arabia is committed to driving energy transition using renewables but not at the cost of traditional fuels as the world needs adequate supply to meet its demand, according to a top official of a Saudi energy body.  

In an exclusive interview with Arab News, the Saudi Association of Energy Economics Chairman Majeed Al-Moneef said that the Kingdom, and the Middle East region as a whole, will be at the forefront of both traditional and renewable energy sources, as it steadily progresses in achieving sustainable goals.  

“We will follow the world trend in increasing the share of renewables in our energy mix. But that will not be done by sacrificing our oil and gas sectors, but along with the development of our oil and gas sectors,” said Al-Moneef.  

The chairman of SAEE which works toward building capabilities in energy economics said the Middle East region is playing a crucial role in the energy transition journey, as it continues supplying hydrocarbons which are pivotal as the world enters a new energy system. 

“We have the Saudi Green Initiative and Middle East Green Initiative. So, we are an important player in traditional energy sources and renewable energy sources. We will be in the forefront of both.”  

He further pointed out that countries in the Middle East region are now heavily investing simultaneously in traditional fuels like oil and gas and renewable energy sources including hydrogen.  

Al-Moneef expects that the share of renewables in the energy mix in almost all regional countries will double or triple by 2030.  

Talking about Saudi Arabia’s Vision 2030, the SAEE chairman said a massive socioeconomic and institutional transformation is taking place across all sectors including energy as the objective is to diversify the economy. “We have got new energy resources like renewables, hydrogen, carbon sequestration and carbon management. They are the sectors of tomorrow. So, we are investing in future energy.”  

This comes as Saudi Arabia is leapfrogging in sustainable energy generation while setting a net-zero target for 2060. 

Al-Moneef pointed out that the region’s financial institutions including corporates, government financing, and multi-regional financing institutions have a crucial role to play in renewable energy projects to achieve sustainable goals within the stipulated timeline.  

IAEE International Conference 

SAEE which works toward facilitating dialogue among various stakeholders is hosting the International Conference of the International Association for Energy Economics for the first time in the Middle East and North Africa region in Riyadh with the King Abdullah Petroleum Studies and Research Center. 

Al-Moneef sounded confident that the IAEE conference which begins on Feb. 4 will witness a record number of participants.  

“This conference will have the largest registration in the history of energy economic conferences. This is the first time that such a conference is being held in the region. So, this is a testament to the importance of Saudi Arabia and the region in the global energy sector,” he said. 

Al-Moneef revealed that regional universities will present scientific papers during the event, and added that events like these hold significance as “they will accelerate the participation of more regional research institutions, individuals and students in the energy sector.”  

Majeed Al-Moneef, chairman of the Saudi Association of Energy Economics. (Supplied)

He disclosed that they had two major meetings involving all the universities in Saudi Arabia to encourage them to submit papers. “We tried to have a wide representation of the region. So, we have good numbers. As a matter of fact, something close to 40 percent of papers is from Saudi Arabia and the region.”   

The SAEE chairman pointed out that the purpose of the conference is to encourage research in energy economics in the region. “That was our main goal. The field of energy economics is of crucial importance to the region, and we should have more researchers in the research institutions, individuals, and students who are engaged in that subject matter.”  

He revealed that the conference will hold special plenary sessions on investment and trade in the energy sector, “as the conflict in Ukraine has changed the trade flows of oil and gas globally.”  

Al-Moneef further pointed out that Saudi Arabia and the region as a whole will host more similar events related to energy economics in the future.  

“As a matter of fact, one of the outcomes of this conference will be to have annual regional conferences in the Middle East. So, one of the outcomes will be to institutionalize a MENA Middle Easy symposium to be held every year,” he said.  

Saudi Arabia is leapfrogging in sustainable energy generation. (SPA)

Al-Moneef noted that Saudi Arabia will be on the organizing committee for the MENA Energy Economics conference that will be held every year, and the Kingdom will make sure that researchers from the institutions in the nation will participate in these upcoming events.  

Regional cooperation  

Talking about the necessity to ramp up power generation and increase the efficiency of energy usage, Al-Moneef stressed that sufficient investments are needed to elevate efficiency “so that the production process will be clean, and efficient with the least cost possible.”  

He also highlighted that international and regional cooperation is very crucial to ensure the growing power demand in the future.  

Al-Moneef who had served in multiple high-profile positions including the Secretary General of the Supreme Economic Council of Saudi Arabia, Governor of Saudi Arabia in the Board of Governors of OPEC, stressed the need to create a common grid that will solve power-generating issues. "It will allow countries with power scarcity to secure help from nations that produce excess power.”  

He added that a common energy market will be soon materialized in the Middle East region, supported by a proper regulatory framework.  

According to him, promoting regional cooperation in the energy field is the key to a new Middle East. “And we have to improve the transportation lines.”  

For Al-Moneef, what the region needs is the proper regulatory framework. “Europe has done it. They have put in place the regulatory framework to see to it that there is a common energy market. We can have someday a common Middle East energy market. We are capable of doing it,” he signed off.  


Almana set to expand network of hospitals outside of the Eastern Province: CEO

Updated 03 February 2023

Almana set to expand network of hospitals outside of the Eastern Province: CEO

RIYADH: As part of its five-year plan, Almana Group of Hospitals, one of the oldest and largest medical groups in Saudi Arabia, is set to expand its network of hospitals, its CEO told Arab News in an exclusive interview. 

Being the first private medical center established in the Eastern Province, the group’s initial focus will be on exploring opportunities for a new hospital outside of the eastern region within the next few years with the view to expanding into other areas following that, Mana Almana informed.

“We are strongly aligned with the vision of our great leaders and stand ready to support the government to build capacity within the sector due to our expanding facilities and offerings tailored to the evolving needs of our communities,” he said.

Almana added: “We recognize that to meet the future needs of the medical sector, we need to partner with world-renowned healthcare institutions to help us accelerate and further develop the Kingdom’s healthcare system.” 

Not surprisingly, the group is also seeking to partner with the Ministry of Health under public-private partnerships to deliver advanced and specialist services.

As the only dedicated oncology unit in eastern Saudi Arabia, the group has recently expanded its specialists department in Dammam to cater to cancer patients’ mounting needs in the region. 

CEO Mana Almana. (Supplied)

“When it comes to oncology, Almana’s goal is to provide cancer patients with the highest international standard of care and cater to the growing need for cancer care in the Kingdom,” Almana said. 

“As such, in addition to our existing seven hospitals and clinics, we decided to create a dedicated space where patients could receive individualized and tailored treatment within a centralized and fully-fledged unit.” 

The new oncology center has been designed with the complexity of cancer in mind. By bringing the group’s 70 specialized oncologists under one roof, it can provide personalized treatments and precision fit for specific types of cancer. 

The new unit will include four new clinics specializing in medical oncology, radiation and surgical oncology in addition to four chemotherapy treatment rooms. 

“Besides providing exceptional treatment for patients, we also focus our efforts on preventive cancer care measures,” Almana explained. 

“Our efforts include free year-round breast-cancer screenings at all branches of Almana hospitals in Dammam, Alkhobar, Ahsa, Jubail and Rakah,” he continued. “Over the years, our free screening has touched the lives of over 10,000 patients, potentially helping to save even more lives.” 

In line with the ambition of Saudi Vision 2030 to unify patient care records and improve health information exchange, the group is investing heavily in technology within its hospitals to ensure all services will be automated while providing seamless service for its patients.

“We are also establishing a new central command center to improve patient outcomes by coordinating care between our hospital locations,” Almana informed. 

“As a group of hospitals, we continuously foster a culture of innovation to create value in areas of high unmet medical need across the Kingdom. For example, we’ve created unique offerings where they currently don’t exist such as our foot disease and diabetes center, the only one in the region,” he continued.

In addition, the group is also taking several steps to train and recruit medical professionals. 

“We also share the ambition of Saudi Vision 2030 to increase the number of females within the workforce,” Almana said. “Already, we have females leading our medical departments and are looking to increase this even further by 20 percent over the next five years.” 

“Over the last 10 years, we’ve also helped develop the next generation of doctors and nurses in the Kingdom through our official healthcare training academy, Mohammed Almana College for Medical Science, which contributes to over 180 Saudi graduate nurses each year,” he pointed out.

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Who is Hindenburg, the firm targeting India’s Adani?

Updated 03 February 2023

Who is Hindenburg, the firm targeting India’s Adani?

  • Hindenburg is an investment research firm with a focus on activist short-selling. It looks for corruption or fraud in the business world, such as accounting irregularities and bad actors in management, and It can make money out of its work

NEW YORK: Hindenburg Research, the financial research firm with an explosive name and a track record of sending the stock prices of its targets tumbling, is taking on one of the world’s richest men.
Hindenburg is back in the headlines after last week accusing Indian conglomerate Adani Group of “a brazen stock manipulation and accounting fraud scheme.” It cited two years of research, including talks with former Adani senior executives and reviews of thousands of documents.
The Adani Group has blasted the accusations, calling them “a malicious combination of selective misinformation and stale, baseless and discredited allegations that have been tested and rejected by India’s highest courts.”
Nevertheless, Hindenburg’s scorching allegations have caused the fortune of Adani Group’s founder, Gautam Adani, to slide by nearly $47 billion in just over a week, according to the Bloomberg Billionaires index. Here’s a look at the firm behind all the movement:
What is it?
Hindenburg says it specializes in “forensic financial research.” In layman’s terms, it looks for corruption or fraud in the business world, such as accounting irregularities and bad actors in management.
Hindenburg has even come to be known as Ponzi hunters in some circles, according to the Washington Post, which detailed how it helped bring down an alleged $500 million scheme that targeted Mormons.
Where did its name come from?
The firm says it sees the Hindenburg, the airship that famously caught fire in the 1930s to the cry of “Oh, the humanity,” as the “epitome of a totally man-made, totally avoidable disaster.” It says it looks for similar disasters in financial markets “before they lure in more unsuspecting victims.”
Who else has Hindenburg gone after?
It’s perhaps most famous for a 2020 report on Nikola, a company in the electric-vehicle industry whose founder Hindenburg said made misleading claims to ink partnerships with top auto companies hungry to catch up to Tesla.
Among its allegations, Hindenburg accused Nikola of staging a video to calm skepticism about its truck, one that showed the vehicle cruising on a road. Hindenburg said the video was actually just showing the truck rolling down a hill after getting towed to the top.
What has come of such accusations?
For Nikola, quick scrutiny from the government and investors.
The company and its founder, Trevor Milton, received grand jury subpoenas from the US Attorney’s office for the Southern District of New York and the N.Y. County District Attorney’s Office shortly after Hindenburg released its report.
The Securities and Exchange Commission also soon issued subpoenas to Nikola’s directors.
Milton was convicted this past October of charges he deceived investors with exaggerated claims about his company’s progress in producing zero-emission 18-wheel trucks fueled by electricity or hydrogen.
And Nikola in late 2021 agreed to pay $125 million to settle SEC charges that it defrauded investors by misleading them about its products, technical advancements, and commercial prospects.
What does Hindenburg get out of this?
It can make money. In its Adani report, it said that it had taken a “short position in Adani Group Companies” through bonds that trade in the US and other investments that trade outside India.
It has made similar “short” bets against other companies it published unflattering reports on. A “short” trade is a way for someone to make money if an investment’s price falls. Afterward, if the price of a company’s stock or bonds falls because of the negative attention from the report, Hindenburg can profit.
Such short sellers have been criticized for unfairly pushing down prices of stocks with potentially unfounded allegations. But proponents also call them a healthy part of a stock market, keeping stock prices in check and preventing them from running too high.