EconSource: BP Joins Total in Writing Off Oil Assets Amid Libya Conflict

Conflict in Libya has led European oil companies including British Petroleum (BP) and France’s Total SA to write off millions of dollars in investments in the country. On Tuesday, BP said it had taken a loss of almost $600 million in the second quarter of 2015 as fighting in Libya forced it to suspend an oil exploration campaign. The unexpected loss was the main reason BP’s earnings fell short of analysts’ estimates. The loss comes three months after Total became the first European oil major to take an impairment in Libya, writing off $755 million from onshore assets. Italy’s Eni, however, has sustained output in Libya despite growing insecurity. Like Eni, Madrid-based Repsol has not written down its assets in the country, although it has suffered from intermittent production outage. [Bloomberg, Libya Monitor (subscription), 7/28/2015]

Syria war costs more than twice peacetime GDP
The cumulative economic loss since war broke out in Syria is equivalent to 229 percent of the country’s 2010 gross domestic product (GDP), according the Syrian Center for Policy Research. Energy, manufacturing and agriculture have suffered the most, according to a Chatham House report released last month. “Wealth and production infrastructure has been destroyed,” said Sami Nader, head of the Beirut-based Levant Institute for Strategic Affairs. “It’s also threatening the economy and social fabrics of border countries, namely Lebanon and Jordan, which don’t have the resources to absorb the large number of refugees.” [Bloomberg, 7/29/2015]

Deutsche Bank, HSBC said arranging $3.7 billion Egypt power loan
Egypt is seeking to raise about $3.7 billion in loans to fund power plants after signing a deal with Siemens AG to build the projects. Deutsche Bank AG, HSBC Holdings Plc. and Kfw-Ipex Bank AG are helping state-controlled Egyptian Electricity Holding Co. raise the funds. The loan is being supported by export credit agency Euler Hermes Group. A draft loan agreement has been referred to the economic ministers’ group for review, Minister of Electricity Mohamed Shaker said in a phone interview, without confirming the size of the loan. The loan carries a guarantee from the Ministry of Finance with the first tranche expected to be drawn in about six months, he said. A spokesman for Euler Hermes said the company is aware of the deal but no decision had been taken to back it.  [Bloomberg, 7/28/2015]

IMF warns Turkey of low net international reserves, high short-term debt stocks
Turkey remains vulnerable to capital flow reversal given large financing needs and the short-term nature of capital inflows, the International Monetary Fund (IMF) said in its 2015 External Sector Report. “Developments so far in 2015 suggest some strengthening of the external position in Turkey, mainly due to terms of trade gain from lower oil import prices. However, net international reserves are still low, and the net international investment position (NIIP) will continue to deteriorate until the current account deficit is narrowed,” the report said. Gross external financing needs are estimated at more than 25 percent of gross domestic product (GDP) in 2015, making Turkey vulnerable to changes in global market conditions, according to the IMF. [Hurriyet, 7/29/2015]

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