Libya prepares to boost oil exports as key ports reopen

An oil storage tank at Sidra port. Libyan plans to lift crude exports have eased market fears of a supply crunch. (AFP)
Updated 11 July 2018
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Libya prepares to boost oil exports as key ports reopen

  • Four Libyan export terminals are being reopened after eastern factions handed over the ports
  • However war-torn North African country thought unlikely to be unable to plug expected losses from Iran and current outage from Venezuela

LONDON: The price of Brent crude fell Wednesday after Tripoli-based National Oil Corp. (NOC) said four Libyan export terminals were being reopened after eastern factions handed over the ports.

The move, which ends a standoff that had shut down most of Libya’s oil output, was expected to lead to an export uplift of 800,000 barrels a day that was lost in recent weeks after factional infighting.

But in an interview with Arab News, Shakil Begg, global head of oil research at Thomson Reuters in London, said while the Libyan development would ease market concern of a looming supply crunch, the war-torn North African country would be unable to plug expected losses from Iran, or mitigate the current massive outage from crisis-hit Venezuela.

Begg said: “We are skeptical about how much Libyan crude can be exported quickly. One issue is the extent to which some fields have been shuttered because they can’t store the oil being produced.”


He added: “Our expectation is that supply growth will be pretty moderate.” Pipeline infrastructure was susceptible to attack, he said.

Analysts have said the reimposition of US sanctions on Iran by late 2018 could remove between 600,000 and 1 million barrels per day available to global export markets — a threat that has seen the price of Brent crude reach $80 a barrel. On Wednesday, following the Libyan announcement, the price retreated from just under $79 to $77.50.

Begg said that only Saudi Arabia could sustain a big rise in production from around 10.5 million barrels per day to about 11 million barrels in order to plug lost Venezuelan and Iranian production.

“They have between 500,000 and 600,000 barrels of spare capacity which could come onto the market,” said Begg. But even this might not be enough plug supply gaps, he suggested.

A report in Petroleum Economist on July 3 said Libyan eastern ports that fell under the control of Khalifa Hafter’s Libya National Army (LNA), saw the destruction of storage tanks in fierce fighting.

For instance, Ras Lanuf’s storage capacity was cut from 950,000 barrels to 550,000. “With limited storage, and tanker arrivals often episodic, field managers across the Sirte Basin may need to halt pumping operations, cutting daily (Libyan) output,” said Petroleum Economist.

Neil Atkinson, head of oil industry and markets at the International Energy Agency, told Arab News that Venezuela’s production could fall by the end of this year by another several hundred thousand barrels a day, “given the degradation of the oil industry there, a prognosis that is quite widely accepted,” he said.

Begg said Saudi Arabia was increasing production now, but a lot of the increase was being consumed domestically as temperatures rise and demand for air conditioning soars.

Begg forecast that prices this year would hover between $72/bbl to $80/bbl, but could spike at $85/bbl and he had a similar forecast for 2019.

A statement on NOC’s website said the company was aiming for “the lifting of force majeure in the ports of Ras Lanuf, Es Sider, Hariga and Zuetina after the facilities were handed over to the corporation this morning, July 11.”

“Production and export operations will return to normal levels within the next few hours,” said NOC.

The statement also said that “the chairman (Mustafa Sanalla) and members of the board of directors of the NOC commended the Libyan National Army General Command for putting the national interest first.”

Sanalla also said Libya needed a proper national debate on the fair distribution of oil revenues.

“(This) is at the heart of the recent crisis. The real solution is transparency, so I renew my call on the responsible authorities, the ministry of finance and central bank, to publish budgets and detailed public expenditure. Libyan citizens should be able to see how every dinar of their oil wealth is spent.”

FASTFACTS

Libya, with Africa’s largest crude reserves, lost hundreds of thousands of barrels of daily production last month amid clashes between armed militias.


Saudi Aramco’s net profit hits $27.27bn in Q1 2024 

Updated 6 sec ago
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Saudi Aramco’s net profit hits $27.27bn in Q1 2024 

RIYADH: Energy giant Saudi Aramco reported a net profit of $27.27 billion in the first three months of this year, marking a 2.04 percent increase compared to the previous quarter. 

According to the company’s statement, the state-owned oil firm’s total revenue for the first quarter stood at $107.21 billion, with the total operating income for the period reaching $58.88 billion. 

Amin H Nasser, president and CEO of Saudi Aramco, said: “Our first quarter performance reflects the resilience and strength of Aramco, reinforcing our position as a leading supplier of energy to economies, to industries and to people worldwide.”  

However, when compared with the first quarter of the previous year, the net profit of the Tadawul-listed firm declined by 14.44 percent by the end of March 2024. 

Despite lower net income, Aramco declared a base dividend of $20.3 billion for the first quarter and anticipates distributing its fourth performance-linked dividend of $10.8 billion in the second quarter.

 


PIF’s Alat unveils electrification, AI infrastructure business units 

Updated 06 May 2024
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PIF’s Alat unveils electrification, AI infrastructure business units 

RIYADH: Alat, a flagship company of the Public Investment Fund, unveiled two business units in electrification and AI infrastructure, to establish Saudi Arabia as a premier manufacturing hub globally.

The company unveiled its plans during the Milken Institute Conference held in Los Angeles.

According to a press release, the move comes as part of the PIF company’s strategic vision to spearhead a paradigm shift in industry sustainability while propelling Saudi Arabia on the global stage. 

Alat Global CEO Amit Midha said: “I am pleased to announce these two exciting new divisions as they will make a significant contribution to Alat’s overall strategic goal of developing an advanced, sustainable future for the industry.”

The electrification arm will fortify grid technology, catering to the burgeoning demand for electricity driven by exponential growth in renewable energy sources like solar, wind, and hydrogen. 

By harnessing Saudi Arabia’s solar energy and other clean resources, the firm seeks to manufacture innovative solutions that will catalyze the global energy transition and drive decarbonization in industry.

The electrification unit will specifically focus on enhancing transmission and distribution technologies, facilitating the integration of renewable energy into existing grids, and pioneering advancements in gas and hydrogen generation and compression technologies.

On the other front, the AI Infrastructure business unit will address the escalating global demand for AI capabilities across industries. 

This entails the development of cutting-edge technologies encompassing network and communications equipment, servers, data center networking, storage, industrial edge servers, and Industry 4.0 computing. 

“The global electrification market size reached $73.64 billion in 2022 and it is expected to hit around $172.9 billion by 2032, growing at a CAGR of 8.91 percent between 2023 and 2032,” the press release added.

The global AI Infrastructure market is set to hit $460.5 billion by 2033, with a robust 28.3 percent compound annual growth rate, driven by widespread adoption across industries for innovation, decision-making enhancement, and task automation.

As a gold sponsor at the Milken Institute Conference, the firm now has nine business units focused on sustainable technology manufacturing.

“Alat will invest $100 billion by 2030 across these business units to develop key partnerships and build advanced manufacturing capabilities in Saudi Arabia to bring jobs and economic diversification to the Kingdom,” the press release said.


Saudi Arabia’s Qiddiya to build region’s largest water theme park

Updated 06 May 2024
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Saudi Arabia’s Qiddiya to build region’s largest water theme park

  • Aquarabia will also feature the first underwater adventure trip with diving vehicles

RIYADH: Saudi Arabia Qiddiya Investment Co. will construct the region’s largest water theme park as a cornerstone of its Six Flags Qiddiya City venture it was announced on Monday.
To be named Aquarabia, Qiddiya hopes to draw visitors from around the globe with 22 attractions and water experiences suitable for all family members, as well as some “world-first” attractions, Saudi Press Agency reported.
These attractions include the world’s first double water loop, the tallest water coaster with the highest jump, the longest and highest water racing track, and the tallest water slide.

Aquarabia will also feature the first underwater adventure trip with diving vehicles, catering to adventure enthusiasts with water sports areas designated for rafting, kayaking, canoeing, free solo climbing, and cliff jumping.
Additionally, the park will introduce the first surfing pool in the Kingdom, incorporating immersive design elements themed around ancient desert water springs and Qiddiya’s wildlife.
With sustainability in mind, Aquarabia will implement advanced systems capable of reducing water waste by up to 90 percent and decreasing energy consumption. As part of the Six Flags Qiddiya project, the venture, the first Six Flags of its kind outside North America, aims to recycle operational waste, diverting over 80 percent from landfill.

Scheduled to open in 2025, both Aquarabia and Six Flags Qiddiya City are situated within Qiddiya City, forming a fully walkable neighborhood offering a diverse array of activities, accommodations, dining options, and relaxation spots.
Abdullah Al-Dawood, managing director of Qiddiya Investment Co., hailed the announcement as a significant milestone for Qiddiya and the entertainment, tourism, and sports sectors in the Kingdom.
He emphasized that the projects will cater to diverse entertainment needs while contributing to economic diversification and job creation in the tourism sector.
The project also aims to meet the growing local demand for immersive entertainment experiences, particularly in water activities, aligning with the goals of Saudi Arabia’s Vision 2030 to enhance local tourism and employment opportunities.
The unveiling of Aquarabia follows the announcement of several other entertainment, sports, and cultural attractions in Qiddiya, including the world’s first multi-use gaming and electronic sports area, the multi-sport Prince Mohammed bin Salman Stadium and the Dragon Ball amusement park.
 


Saudi Arabia ascends as key destination for global talent: BCG report

Updated 06 May 2024
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Saudi Arabia ascends as key destination for global talent: BCG report

RIYADH: Saudi Arabia has emerged as a key player in attracting global talent amid ongoing geopolitical shifts and financial uncertainty, moving up two spots on the list of preferred countries for workforce mobility. 

The “Decoding Global Talent 2024” report by Boston Consulting Group highlights Saudi Arabia’s rise to the 26th most preferred country, underscoring the success of the Kingdom’s strategic initiatives to position itself as a global hub for professionals.  

This fourth edition of the study draws insights from over 150,000 professionals across 188 nations, tracking global talent trends since 2014. 

Riyadh’s rise to the 54th rank globally underscores its emergence as a hub of opportunity and progress in the eyes of global talent.  

Christopher Daniel, managing director and senior partner at BCG, said: “As the global talent shortage becomes an increasingly pressing challenge for the world's foremost economies, Saudi Arabia is emerging as a pivotal player in narrowing this gap.”  

He added: “With a significant proportion of respondents citing the quality of job opportunities, the attractive income, tax, and cost of living, as well as the assurance of safety, stability, and security as key reasons for choosing the Kingdom, it’s evident that Saudi Arabia’s strategic investments in its labor market are bearing fruit.” 

Daniel noted that the Kingdom is leveraging labor migration to enhance its workforce, offering a secure and hospitable environment that caters to the diverse needs of international professionals. 

“By fostering a job market that is attuned to the evolving aspirations of global talent while prioritizing their well-being, Saudi Arabia is positioning itself as a compelling destination for those seeking growth and fulfillment in their careers,” he said.

Furthermore, the report highlights that younger generations and individuals from rapidly expanding populations are particularly attracted to global mobility, pursuing diverse experiences and opportunities for professional growth. 

With 23 percent of global professionals actively pursuing international positions and 63 percent remaining receptive, Saudi Arabia is well-positioned to capitalize on this trend.  

The Kingdom offers an enriching environment for a globally oriented workforce to excel and progress in their careers, presenting an enticing option for individuals seeking both personal and professional advancement in an ever more interconnected global landscape. 


Riyadh Air to expand fleet with additional aircraft orders, CEO reveals 

Updated 06 May 2024
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Riyadh Air to expand fleet with additional aircraft orders, CEO reveals 

RIYADH: Saudi Arabia’s Riyadh Air plans to bolster its aircraft lineup through additional orders, as it requires “a very large fleet” to establish itself alongside regional giants, stated the CEO. 

This move comes as the Kingdom’s second flag carrier, backed by the country’s Public Investment Fund, ordered 39 Boeing 787-9 jets last year, with options for 33 more. 

It also aligns well with Saudi Arabia’s goal to expand its aviation industry and attract more tourists, broadening its airline capacity beyond pilgrimage travel, which currently forms the backbone of the country’s inbound tourism. 

“We need a very large fleet, we’re going to make a number of additional orders,” CEO of Riyadh Air, Tony Douglas, said in an interview with Bloomberg Television. 

He added: “We will be making a narrowbody order, we’ll probably be doing another large order after that to build us up to scale.”  

During the interview, Douglas, who previously led the Abu Dhabi flag carrier Etihad Airways, expressed being “very conscious” of potential delays to aircraft deliveries. This concern arises as both Boeing and Airbus SE grapple with production challenges amidst record demand and supply issues at the two plane makers. 

The establishment of a second Saudi national airline alongside the existing flag carrier Saudia is part of the Kingdom’s economic diversification plan. 

In November 2023, Douglas expressed confidence in the demand for travel. “We’re not well enough connected. It’s as simple as that,” he said at the time. 

The new airline stands to benefit from Saudi Arabia’s rapidly growing economy and the increasing influx of tourists to the Kingdom. Riyadh Air does not intend to pursue mergers and acquisitions to fuel its growth. “No, it’s organic,” Douglas emphasized at the time. 

The initial destinations will include major cities in Europe, the US East Coast, and Canada, with the inaugural flight scheduled to depart by June 2025. 

By that time, Riyadh Air will have secured slots at major airports, Douglas mentioned, although hubs like London Heathrow are already operating close to capacity. 

“It won’t be easy ... but we have no reason to be anything other than confident that we’ll resolve all of that,” he said at the time.