Banks are tightening lending conditions for small, private companies in the Gulf, a sign that the region’s economies are not escaping damage from the plunge of oil prices. Mostly, the members of the Gulf Cooperation Council (GCC) are coping comfortably with the new era of cheap oil. However, small firms without shareholding links to governments are finding it increasingly difficult to borrow. When small firms can secure loans, banks are demanding tougher terms such as more collateral, stricter documentation and shorter tenors. Lending to small and medium-sized enterprises (SMEs) is only a tiny part of GCC banks’ business, but what’s happening with SMEs could eventually become a trend for the wider corporate sector. [Reuters, 4/28/2015]
Libya oilfield write-off by Total is ominous sign to other firms
The conflict in Libya is starting to force European oil companies to write off assets in North Africa as militias attack oil fields and terminals. Total SA became the first major European group to take an impairment in Libya, writing off $755 million from its onshore assets, the France-based producer said in its quarterly statement. Italy’s Eni and Spain’s Repsol, which have much larger operations in Libya, have yet to mark down the value of their assets. Total also took a $75 million impairment on its onshore oil operations in Yemen. [Bloomberg, 4/28/2015]
Oil prices fall as Saudis vow to maintain Asian supply
Oil prices declined on Tuesday as Saudi Arabia vowed to remain a key supplier to Asia, China in particular. Asian demand for crude oil remains strong and Saudi Arabia is ready to supply to the continent, the kingdom’s oil minister said in a speech in Beijing. The oil official said the recent slump in oil prices, followed by a minor recovery, harms long-term plans and investments in the industry. Cheap oil has helped growing economies in Asia, but also posed difficult challenges for many of the oil producers. [Wall Street Journal, 4/28/2015]
World Bank releases report detailing the impact of Syria’s war on neighboring trade
A new World Bank report says the economic effects of Syria’s war extend beyond the country’s borders. In particular, the conflict has been detrimental to neighboring countries’ trade, as the declining demand for goods and services in Syria has affected exporters in neighboring countries. Trade through Syria has also become more difficult. In some cases, producers in neighboring countries have replaced Syrian producers as their assets in Syria were destroyed. [World Bank (blog), 4/27/2015]
Also of interest
Oil slips as ample supply counters Yemen, drilling slump | Reuters
Morocco continues renewable push with Saudi backed wind project | Forbes
Egyptian central bank governor cites $40.2 billion decrease in external debt | DNE
Egypt’s Suez Canal revenues at $420.1 million in March | Reuters
Libya’s Hariga oil port running again after brief closure | Libya Herald
Libya’s Tobruk cabinet approves budget spending | Libya Monitor (subscription)
World Bank considering new financial support for Jordan | The Jordan Times