As oil rises and shale booms, Emirates is going back to Houston with the A380

The Bayou City is the capital of the American oil business, some would say the global energy industry. (AP Photo)
Updated 06 March 2018
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As oil rises and shale booms, Emirates is going back to Houston with the A380

HOUSTON: The traditional way to check the health of the global oil business is to look up the price of a barrel of Brent crude on international markets; the other way is to check out the flight from Dubai to Houston in Texas.
The Bayou City is the capital of the American oil business, some would say the global energy industry. It first grew out of a need to get Texas oil to global markets, providing the right kind of port facilities on the Texas coast to ship crude to the rest of the US and beyond.
It had another boost when the port at nearby Galveston was destroyed by the 1900 hurricane, still the biggest killer hurricane in American history. Hurricanes are a fact of life in these parts, as the world was reminded of by the devastation of Hurricane Harvey last year.
Houston received yet more business when technology allowed offshore oil to be recovered from the Gulf of Mexico, and since the turn of the century it has been mission control for the US shale business, which has revolutionized the global oil industry.
The city is close to the Eagle Ford shale oil field in west Texas, one of the original areas where fracking techniques were perfected to allow oil to be driven from previously unexploitable rocks. Now Houston serves as operational and financial headquarters for the whole of the US shale industry, even those operations much further north in Nebraska and North Dakota. These fields have enabled the US to overtake Saudi Arabia to become the second-largest oil producer, with the biggest, Russia, in its sights sometime in the next two years.
Houston’s central place in the oil business persuaded Emirates Airline in late 2014 that it was a suitable case for the A380 treatment, and the Dubai airline began a daily flight with the double-decker plane late that year, flying more than 500 passengers on the 16-hour trip.
By summer of 2016, the oil price decline had continued, affecting the whole of the global business but hitting US shale men especially hard. Emirates decided to scale back to Boeing 777s, which carry about 150 fewer passengers.
The slow but steady recovery in the oil price last year, and booming prospects for shale in particular, has now persuaded Emirates to reinstate the A380. The airline announced last month it would be resuming A380 flights to George Bush Intercontinental Airport from next June.
The bigger plane is certainly needed, if a recent flight is anything to go by. Last Sunday’s EK211 was packed to the aisles. Economy class was further proof of the appeal of Emirate’s strategy as a connector hub between south Asia and north America, and also evidence of the American airlines’ short-sightedness in virtually deserting this market.
First and business class were also 100-percent full, mainly with oil industry executives and financiers heading to the CERAWeek by IHS Markit meeting, even in Houston the “oil man’s Davos.” With Emirates providing the only direct link between the Arabian Gulf and Houston, the airline looks set to clean up — as long as the oil price stays roughly where it is.


Libya’s National Oil against paying ‘ransom’ to reopen El Sharara field

Updated 14 December 2018
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Libya’s National Oil against paying ‘ransom’ to reopen El Sharara field

  • Ransom payment would set dangerous precedent
  • NOC declared force majeure on exports on Monday

BENGHAZI: Libya’s state-owned National Oil Corp. (NOC) said it was against paying a ransom to an armed group that has halted crude production at the country’s largest oilfield.
“Any attempt to pay a ransom to the armed militia which shut down El Sharara (oilfield) would set a dangerous precedent that would threaten the recovery of the Libyan economy,” NOC Chairman Mustafa Sanalla said in a statement on the company’s website.
NOC on Monday declared force majeure on exports from the 315,000-barrels-per-day oilfield after it was seized at the weekend by a local militia group.
The nearby El-Feel oilfield, which uses the same power supply as El Sharara, was still producing normally, a spokesman for NOC said, without giving an output figure. The field usually pumps around 70,000 bpd.
Since 2013 Libya has faced a wave of blockages of oilfields and export terminals by armed groups and civilians trying to press the country’s weak state into concessions.
Officials have tended to end such action by paying off protesters who demand to be added to the public payroll.
At El Sharara, in southern Libya, a mix of state-paid guards, civilians and tribesmen have occupied the field, camping there since Saturday, protesters and oil workers said. The protesters work in shifts, with some going home at night.
NOC has evacuated some staff by plane, engineers at the oilfield said. A number of sub-stations away from the main field have been vacated and equipment removed.
The occupiers are divided, with members of the Petroleum Facilities Guard (PFG) indicating they would end the blockade in return for a quick cash payment, oil workers say. The PFG has demanded more men be added to the public payroll.
The tribesmen have asked for long-term development funds, which might take time.
Libya is run by two competing, weak governments. Armed groups, tribesmen and normal Libyans tend to vent their anger about high inflation and a lack of infrastructure on the NOC, which they see as a cash cow booking billions of dollars in oil and gas revenues annually.