EconSource: Iraq Oil Minister Says $9 Billion in Arrears Paid to Oil Firms

Iraq has paid foreign oil companies $9 billion in remaining arrears for 2014 and will pay outstanding fees for 2015 in stages until the beginning of next year, Oil Minister Adel Abel Mehdi said . He added that the ministry will work with foreign oil companies to find ways to reduce and link costs to oil prices. International firms including British Petroleum, Royal Dutch Shell, ExxonMobil, Eni, and Lukoil operate in Iraq’s southern oilfields under service contracts through which they are paid a fixed dollar fee for production. That means that with the drop in oil prices, the amount of crude oil needed to pay foreign firms has roughly doubled. Oil companies have already proposed millions of dollars of budget cuts in response to the price drop. [Reuters, 8/25/2015]

Lebanon planning stimulus package, bond sale
Lebanon’s central bank is planning a stimulus package of at least $1 billion in 2016 to revive the country’s economy, Central Bank Governor Riad Salameh said. Lebanon’s economic growth will likely range between zero and 1 percent this year, the slowest pace since at least 2011, Salameh told Bloomberg on Monday. The planned stimulus could reach $1.5 billion and the central bank will provide the funds to commercial lenders at an interest rate of 1 percent. Banks will then lend the money to small and medium enterprises and environmental and renewable energy projects for as much as 6 percent. Salameh also said the finance ministry has started plans to raise $1.3 billion in bonds in September or October. Lebanon is also considering an early exchange offer on its $750 million January 2016 Eurobonds, depending on market conditions. [Bloomberg, Reuters, 8/24/2015]

Egypt’s central bank approves CIB-Citigroup deal
Egypt’s Commercial International Bank (CIB) said on Tuesday it had received central bank approval to buy Citigroup’s retail business in the country. The purchase includes about $140 million of Citigroup’s assets, $190 million worth of deposits, and nearly 100,000 accounts, CIB said in June when the deal was announced. The deal will add 80,000 credit card holders to CIB’s existing 240,000 and will expand the bank’s consumer lending business by 10 percent. Citigroup said last October that it was pulling out of consumer banking in eleven markets, including Egypt, to cut costs. CIB Chairman Hisham Ezz Al-Arab said in June that he expects that the “integration of Citi’s staff into the CIB family will be seamless and add significant value to our clients and shareholders.” [Reuters, Ahram Online, Aswat Masriya, 8/25/2015]

Saudi Arabia seeking advice on cutting the budget in wake of oil crash
Saudi Arabia is seeking advice on how to cut billions of dollars from its 2016 budget as a result of a global slump in crude oil prices. The government is working with advisers on a review of capital spending plans and may delay or shrink some infrastructure projects to save money. The government is in the early stages of the review and could consider cutting investment spending, estimated to be about 382 billion riyals ($102 billion) this year, by about 10 percent or more. Current spending on areas such as public sector salaries wouldn’t be affected. [Bloomberg, 8/25/2015]

Swiss advance bid to return $40 million stolen from Tunisia
A Swiss official says his country has made headway toward returning some $40 million that was stolen from Tunisia and has been sitting in Swiss banks since 2011. Valentin Zellweger, a legal adviser to the Swiss government, said Monday the federal prosecutor and highest court still have to take steps in the restitution case, but that the process has come a long way. Zellweger declined to specify who had deposited the money in Switzerland, but said it wasn’t former President Zine El Abidine Ben Ali. [AP, 8/24/2015]

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