{"id":255676,"date":"2025-12-09T13:47:54","date_gmt":"2025-12-09T11:47:54","guid":{"rendered":"https:\/\/sada.ly\/en\/?p=255676"},"modified":"2025-12-09T13:47:54","modified_gmt":"2025-12-09T11:47:54","slug":"al-hdhiri-writes-the-nocs-loan-request-to-increase-production-capacity-and-the-recurring-illusions","status":"publish","type":"post","link":"https:\/\/sada.ly\/en\/al-hdhiri-writes-the-nocs-loan-request-to-increase-production-capacity-and-the-recurring-illusions\/","title":{"rendered":"Al-Hdhiri Writes: “The NOC\u2019s Loan Request to Increase Production Capacity and the Recurring Illusions”"},"content":{"rendered":"\n

The legal expert in the oil sector, Othman Al-Hdhiri<\/em>, wrote an article in which he said:<\/p>\n\n\n\n

I read an article by a colleague interested in economics and finance discussing an anticipated loan for the National Oil Corporation, asking whether it is a necessary support for developing production or just another financial burden. He also seemed to believe\u2014rather optimistically\u2014that the proposed loan could bring about a qualitative leap in Libya\u2019s oil sector. However, he avoided addressing several fundamental points that are central to evaluating such a sensitive step. Therefore, I saw it appropriate to respond as follows:<\/p>\n\n\n\n

Despite the validity of the argument that financing is important to complete stalled projects, presenting the matter from a single angle\u2014without addressing the structural issues hindering Libya\u2019s oil sector, whether administrative, political, or regulatory\u2014results in an incomplete argument.<\/p>\n\n\n\n

First: The absence of figures and technical details<\/strong><\/p>\n\n\n\n

For example: the size of the requested loan, the cost of the related projects, the expected return from each project, and the timeline for executing the plans.
This deficiency makes the evaluation closer to impressions than precise economic analysis.<\/p>\n\n\n\n

Second: Ignoring the current management\u2019s track record<\/strong><\/p>\n\n\n\n

A realistic review of the Corporation\u2019s performance in managing previous funding, exceptional budgets, and major projects is essential in assessing its capacity to invest the loan \u201cobjectively and responsibly.\u201d Financial success is not only tied to having money, but to using it efficiently, ensuring transparent contracting, maintaining sound governance systems, and assessing whether the current management of the Corporation and its subsidiaries can employ the funds scientifically and economically.<\/p>\n\n\n\n

Third: The missing political dimension<\/strong><\/p>\n\n\n\n

Libya\u2019s oil sector is not purely technical; it is directly affected by political division, shifting power centers, repeated shutdowns, interventions outside the institutional framework, and the financial ambitions driven each day by tribal and regional connections.<\/p>\n\n\n\n

Combined, these factors can render any new financial commitment vulnerable to obstruction or theft at any moment \u2014 an aspect often overlooked in many discussions.<\/p>\n\n\n\n

Fourth: Would recommending the loan be positive?<\/strong><\/p>\n\n\n\n

In principle, providing the Corporation with funding is a correct and necessary step. But its benefits depend on clear conditions, including:
Accurate identification of project priorities, ensuring independent financial oversight, preventing the use of the loan for operational expenses, and publishing periodic reports on spending and implementation progress.<\/p>\n\n\n\n

Without these safeguards, the loan may become another financial burden added to the state\u2019s crises rather than a lever for production.<\/p>\n\n\n\n

Fifth: Potential points of failure<\/strong><\/p>\n\n\n\n

Even if the loan is secured, key concerns remain:
The potential misuse of funds amid weak oversight, inflated administrative expenses at the expense of productive projects, the waste of part of the loan due to political interference, and the risk of shutdowns or instability disrupting production and hindering repayment. Based on previous experience\u2014where an exceptional budget exceeding 52 billion dinars was squandered without achieving any return, neither in increased production nor in improving fields or workers\u2019 conditions\u2014the risks are considerable.<\/p>\n\n\n\n

In conclusion:<\/strong>
The loan is not a problem in itself, nor is it a magical solution. Its success depends on a stable institutional environment, competent management, and transparent oversight mechanisms.<\/p>\n\n\n\n

Unless the root governance failures within the sector are addressed, injecting money\u2014regardless of its size\u2014may not achieve the expected increase in production and may instead add new financial burdens to a sector already suffering from deepening and accumulating bottlenecks.<\/p>\n\n\n\n

Accordingly, lenders\u2014whether the state, commercial banks, or the foreign bank\u2014must take these considerations into account before embarking on yet another experience destined for repeated failure.<\/p>\n","protected":false},"excerpt":{"rendered":"

The legal expert in the oil sector, Othman Al-Hdhiri, wrote an article in which he said: I read an article by a colleague interested in economics and finance discussing an anticipated loan for the National Oil Corporation, asking whether it is a necessary support for developing production or just another financial burden. He also seemed […]<\/p>\n","protected":false},"author":13,"featured_media":255664,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[683],"tags":[613,614],"class_list":["post-255676","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economic-articles","tag-libya","tag-oil"],"acf":[],"_links":{"self":[{"href":"https:\/\/sada.ly\/en\/wp-json\/wp\/v2\/posts\/255676","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sada.ly\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sada.ly\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sada.ly\/en\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/sada.ly\/en\/wp-json\/wp\/v2\/comments?post=255676"}],"version-history":[{"count":1,"href":"https:\/\/sada.ly\/en\/wp-json\/wp\/v2\/posts\/255676\/revisions"}],"predecessor-version":[{"id":255677,"href":"https:\/\/sada.ly\/en\/wp-json\/wp\/v2\/posts\/255676\/revisions\/255677"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sada.ly\/en\/wp-json\/wp\/v2\/media\/255664"}],"wp:attachment":[{"href":"https:\/\/sada.ly\/en\/wp-json\/wp\/v2\/media?parent=255676"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sada.ly\/en\/wp-json\/wp\/v2\/categories?post=255676"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sada.ly\/en\/wp-json\/wp\/v2\/tags?post=255676"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}