Libya oil, gas exports hit 5-year high of $21.5 bn

Libya oil, gas exports hit 5-year high of $21.5 bn
The Brega oil port in Marsa Brega, 270 km west of Libya’s eastern city of Benghazi. (AFP/File)
Short Url
Updated 15 January 2022

Libya oil, gas exports hit 5-year high of $21.5 bn

Libya oil, gas exports hit 5-year high of $21.5 bn
  • Total net revenues for oil and gas exports last year amounted to $21.5 billion
  • Record levels were achieved in November and December, raising a combined $4.3 billion in the two last months of 2021

TRIPOLI: Libya’s lifeline oil and gas exports raised revenues of more than $21.5 billion in 2021, the highest level in five years, the National Oil Corporation announced Saturday.
Total net revenues for oil and gas exports last year amounted to $21.5 billion as well as 30 million euros in non-dollar sales, the state-run NOC said in a statement.
It said record levels were achieved in November and December, raising a combined $4.3 billion in the two last months of 2021.
“The end of the year 2021 recorded a recovery, and oil prices achieved their largest annual gains since 2016, driven by the recovery of the global economy from the state of stagnation” due to the coronavirus epidemic, NOC chief Mustafa Sanalla said.
Since the 1970s, Libya which sits on the largest known oil reserves in Africa has been heavily dependent on revenues from its hydrocarbon exports.
But in a decade of violence since the 2011 revolt that overthrew and killed dictator Muammar Qaddafi, armed groups have frequently blockaded or damaged oil installations.
The shutdowns have forced the NOC to declare force majeure, a legal move allowing it to free itself from contractual obligations in light of factors beyond its control.
Oil production has recovered to 1.2 million barrels per day, as opposed to between 1.5 million and 1.6 million bpd before the NATO-backed uprising of 2011.
But Sanalla warned “the ability of the oil sector in Libya to invest and advance the process of infrastructure modernization will remain weak in the foreseeable future, especially in light of the scarcity of budgets.”
“What we need more than ever is to think outside the box and create initiatives to save the infrastructure,” he stressed.


Saudi Arabia kicks off the year with a $755 million sukuk issuance

Saudi Arabia kicks off the year with a $755 million sukuk issuance
Updated 10 sec ago

Saudi Arabia kicks off the year with a $755 million sukuk issuance

Saudi Arabia kicks off the year with a $755 million sukuk issuance

RIYADH: The Saudi government offered sukuk denominated in Saudi riyals worth SR2.83 billion ($755 million) in its first issuance for the year 2022, the National Debt Management Center announced on Tuesday.

 


Red Sea International to supply 3 complexes to TRSDC as construction accelerates

Red Sea International to supply 3 complexes to TRSDC as construction accelerates
Updated 9 min 47 sec ago

Red Sea International to supply 3 complexes to TRSDC as construction accelerates

Red Sea International to supply 3 complexes to TRSDC as construction accelerates

RIYADH: Red Sea International Co. signed a SR60.5 million ($16.12 million) contract with The Red Sea Development Co., known as TRSDC, to design, manufacture, supply, and install three complexes in the Saudi western region, according to a bourse filing.

This comes in line to support the construction activities of luxury hotels on three islands in the Red Sea, Sheybarah and Ummahat Al Shaikh islands.

The contract duration is 194 days, the company said in a statement to Saudi stock exchange, Tadawul.

The contract consists of various types of modular units, which can be used as accommodations or offices. These units will be fully furnished to provide all the requirements for the crew working on the construction site.

Revenues and profits will be realized starting the first quarter of 2022.

There are no related parties in the contract, the statement said.

 


Why airlines fear 5G will upend travel this week?

Why airlines fear 5G will upend travel this week?
Updated 19 January 2022

Why airlines fear 5G will upend travel this week?

Why airlines fear 5G will upend travel this week?

AT&T and Verizon will postpone new wireless service near some airports planned for this week after the nation’s largest airlines said the service would interfere with aircraft technology and cause massive flight disruptions.
AT&T said Tuesday it would delay turning on new cell towers around runways at some airports — it did not say how many — and work with federal regulators to settle the dispute.
Verizon said it will launch its new 5G network but added, “we have voluntarily decided to limit our 5G network around airports.”
The moves came after the airline industry raised the stakes in a showdown with AT&T and Verizon over plans to launch 5G wireless service this week, warning that thousands of flights could be grounded or delayed if the rollout takes place near major airports.

WHOSE SIDE IS THE GOVERNMENT ON?
Both.
The Federal Communications Commission, which runs the auctions of radio spectrum, determined that C-Band could be used safely in the vicinity of air traffic. The FCC in 2020 set a buffer between the 5G band and the spectrum that planes use to resolve any safety concerns.
But Buttigieg and FAA Administrator Stephen Dickson, whose agency is responsible for aviation safety, saw a potential problem. On Friday, they asked AT&T and Verizon to hold off activating C-Band 5G near an undetermined number of “priority airports” while the FAA conducted further study.

HOW DID AT&T AND VERIZON RESPOND?
They dismissed the concerns. The wireless industry trade group CTIA notes that about 40 countries have deployed the C-Band strand of 5G without reports of harmful interference with aviation equipment.
But AT&T CEO John Stankey and Verizon CEO Hans Vestberg did offer to reduce the power of their 5G networks near airports, as France has done.
“The laws of physics are the same in the United States and France,” Stankey and Vestberg said in a letter Sunday to Buttigieg and Dickson. “If U.S. airlines are permitted to operate flights every day in France, then the same operating conditions should allow them to do so in the United States.”
Although they took steps to soothe the federal officials, the telecoms are still bickering with airlines, which have canceled more than 10,000 U.S. flights since Christmas Eve because of bad weather and labor shortages caused by COVID-19.
“While the airline industry faces many challenges, 5G is not one of them,” Vestberg said in a company memo Tuesday.

HOW MANY PLANES DOES THIS AFFECT?
Under the agreement, the FAA will conduct a survey to find out. The FAA will allow planes with accurate, reliable altimeters to operate around high-power 5G. But planes with older altimeters will not be allowed to make landings under low-visibility conditions.

WHAT WILL HAPPEN IN THE NEXT TWO WEEKS?
The two-week postponement will give the FAA and the companies time to implement the agreement.
AT&T and Verizon will be allowed to launch C-Band service this month under already-granted FCC licenses. The airlines have until Friday to give the companies a list of up to 50 airports where they believe the power of C-Band service should be reduced through July 5.
Until July, the telecoms will talk to the FAA and airlines about potential long-term measures regarding 5G service near airports. However, under terms of the agreement with the FAA, AT&T and Verizon will have sole power to decide if any changes in service will be made.
“We felt that it was the right thing to do for the flying public, which includes our customers and all of us, to give the FAA a little time to work out its issues with the aviation community and therefore avoid further inconveniencing passengers with additional flight delays,” Vestberg said in his memo.
Nicholas Calio, president of the airline trade group, was more muted in his comments about the agreement, although he thanked federal officials for reaching the deal with AT&T and Verizon.
“Safety is and always will be the top priority of U.S. airlines. We will continue to work with all stakeholders to help ensure that new 5G service can coexist with aviation safely,” Calio said.
The FAA issued a brief statement about the two-week delay, saying it looks forward "to using the additional time and space to reduce flight disruptions associated with this 5G deployment.”

 


Microsoft buys game maker Activision Blizzard for about $70 billion

Microsoft buys game maker Activision Blizzard for about $70 billion
Updated 19 January 2022

Microsoft buys game maker Activision Blizzard for about $70 billion

Microsoft buys game maker Activision Blizzard for about $70 billion
  • Deal will turn Microsoft, maker of the Xbox gaming system, into one of the world’s largest video game companies
  • Microsoft CEO Satya Nadella vows to address issues of misconduct and unequal pay against Activision

Microsoft is paying nearly $70 billion for Activision Blizzard, the maker of Candy Crush and Call of Duty, to boost its competitiveness in mobile gaming and virtual-reality technology.
The all-cash $68.7 billion deal will turn Microsoft, maker of the Xbox gaming system, into one of the world’s largest video game companies. It will also help it compete with tech rivals such as Meta, formerly Facebook, in creating immersive virtual worlds for both work and play.
If the deal survives scrutiny from US and European regulators in the coming months, it could be one of the biggest tech acquisitions in history. Dell bought data-storage company EMC in 2016 for around $60 billion.
Activision has been buffeted for months by allegations of misconduct and unequal pay. Microsoft CEO Satya Nadella addressed the issue Tuesday in a conference call with investors.
“The culture of our organization is my No. 1 priority,” Nadella said, adding that ”it’s critical for Activision Blizzard to drive forward” on its commitments to improve its workplace culture.
Activision disclosed last year it was being investigated by the Securities and Exchange Commission over complaints of workplace discrimination and in September settled claims brought by US workforce discrimination regulators. California’s civil rights agency sued the Santa Monica-based company in July, citing a “frat boy” culture that had become a “breeding ground for harassment and discrimination against women.”
Wall Street saw the acquisition as a big win for Activision Blizzard Inc. and its shares soared 25 percent in trading Tuesday, making up for losses over the past six months since California’s discrimination lawsuit was filed. Shares of Microsoft slipped about 2 percent.

HIGHLIGHT

Acquisition to push Microsoft past Nintendo as the third-largest video game company by global revenue, behind Playstation-maker Sony and Chinese tech giant Tencent

Last year, Microsoft spent $7.5 billion to acquire ZeniMax Media, the parent company of video game publisher Bethesda Softworks, which is behind popular video games The Elder Scrolls, Doom and Fallout. Microsoft’s properties also include the hit game Minecraft after it bought Swedish game studio Mojang for $2.5 billion in 2014.
The Redmond, Washington, tech giant said the latest acquisitions will help beef up its Xbox Game Pass game subscription service while also accelerating its ambitions for the metaverse, a collection of virtual worlds envisioned as a next generation of the Internet. While Xbox already has its own game-making studio, the prospect of Microsoft controlling so much game content raised questions about whether the company could restrict Activision games from competing consoles, although Nadella promised the deal would help people play games “wherever, whenever and however they want.”
The acquisition would push Microsoft past Nintendo as the third-largest video game company by global revenue, behind Playstation-maker Sony and Chinese tech giant Tencent, according to Wedbush Securities analyst Daniel Ives.
“Microsoft needed to do an aggressive deal given their streaming ambitions and metaverse strategy,” Ives said. ”They’re the only game in town that can do a deal of this size with the other tech stalwarts under massive tech scrutiny.”
Meta, Google, Amazon and Apple have all attracted increasing attention from antitrust regulators in the US and Europe, but the Activision deal is so big that it will also likely put Microsoft into the regulatory spotlight, Ives said. Microsoft is already facing delays in its planned $16 billion acquisition of Massachusetts speech recognition company Nuance because of an investigation by British antitrust regulators.
Microsoft is able to make such a big all-cash purchase of Activision because of its success as a cloud computing provider. But after years of focusing on shoring up its business clients and products such as the Office suite of email and other work tools, Ives said Microsoft’s failed 2020 attempt to acquire social media platform TikTok may have “really whet the appetite for Nadella to do a big consumer acquisition.”
Pushback against the deal was immediate from consumer advocacy groups.
“No way should the Federal Trade Commission and the US Department of Justice permit this merger to proceed,” said a statement from Alex Harman, competition policy advocate for Public Citizen. “If Microsoft wants to bet on the ‘metaverse,’ it should invest in new technology, not swallow up a competitor.”

BACKGROUND

Activision was formed in 1979 by former employees of Atari Inc., a pioneer in arcade games and home video game consoles.

White House press secretary Jen Psaki had no comment on Microsoft’s announcement at her briefing Tuesday, but emphasized the Biden administration’s recent moves to strengthen enforcement against illegal and anticompetitive mergers.
Started in 1979 by former Atari Inc. employees, Activision has created or acquired many of the most popular video games, from Pitfall in the 1980s to Guitar Hero and the World of Warcraft franchise. Bobby Kotick, 59, has been CEO since 1991.
Microsoft said it expects the deal to close in its 2023 fiscal year, which starts in July. It said Kotick will continue to serve as CEO. After the deal closes, the Activision business unit would then report to Phil Spencer, who has led Microsoft’s Xbox division and will now serve as CEO of Microsoft Gaming.
Kotick survived a number of executive shakeups at Activision last year after a series of controversies stemming from allegations of a toxic workplace culture. A shareholder lawsuit in August said the company failed to disclose to investors that it was being investigated in California and that it had workplace culture issues that could result in legal problems.
Activision reached a deal in September with the US Equal Employment Opportunity Commission to settle claims that followed a nearly three-year investigation. The agency said Activision failed to take effective action after employees complained about sexual harassment, discriminated against pregnant employees and retaliated against employees who spoke out, including by firing them.
Microsoft has also been investigating its own practices toward sexual harassment and gender discrimination, opening an inquiry last week sought by investors at its annual shareholders meeting in November. The company committed to publishing a report later this year on how it handles harassment claims, including past allegations involving senior leaders such as co-founder Bill Gates.
 


Crude oil’s latest bull run puts spotlight on geopolitical events

Crude oil’s latest bull run puts spotlight on geopolitical events
Updated 19 January 2022

Crude oil’s latest bull run puts spotlight on geopolitical events

Crude oil’s latest bull run puts spotlight on geopolitical events
  • Having spent the last year fretting over supply, markets and investors appear suddenly more spooked by the ‘what ifs’ of global politics and its impact on still tight supplies

LONDON: Crude oil’s latest bull run, which saw Brent climb to its highest level since 2014 on Tuesday, has put geopolitics front and center of market concerns.

Having spent the last year fretting over supply, markets and investors appear suddenly more spooked by the what ifs of global politics and its impact on still tight supplies.

This week’s drone attack by Iranian-backed Houthi rebels on the UAE, along with fears that Russia’s aggression towards neighboring Ukraine will lead to war, are nudging crude prices higher. The spike comes despite a view in some circles that supply issues are abating when compared to last year. A consensus view from energy analysts suggests current geopolitical events, primarily increased Middle East tensions and Russia’s saber-rattling, have added almost 12 percent to the price of a barrel of crude oil.

Alan Gelder, vice president for refining, chemicals and oil markets with UK energy consultant Wood Mackenzie, said: “Broadly speaking, geopolitics currently accounts for around $10 of the oil price.” Following the UAE attack, Goldman Sachs upwardly revised its price forecast, warning on Tuesday that Brent could reach $90 per barrel in the next two months and hit $100 in the second half of this year. However, Gelder believes triple figure oil prices could prove wide of the mark.

He told Arab News: “We don’t believe the oil market will be as tight in 2022 as it was in 2021. We’re expecting US oil production to grow because the investment discipline of recent years will now enable companies to drill and increase investment supply while still achieving high returns for investors.”

He added: “One can never say never, but we think forecasts of $100 oil are slightly overrated. The rig count is increasing in the US, albeit modestly, so supply will increase this year. Geopolitical events are of course hard to predict and are capable of causing further price shocks, though it would take an extreme production outrage at a major supplier for the current fundamentals of supply and demand to be impacted.” That said, it is worth remembering geopolitical events were behind the first big jump in oil prices last year.

In March 2021, just after OPEC and its OPEC+ allies announced they would stick to their production cuts, the Houthi militia launched a failed attack on Saudi Arabia’s Ras Tanura oil-export terminals and refinery. 

FASTFACT

A consensus view from energy analysts suggests current geopolitical events, primarily increased Middle East tensions and Russia’s saber-rattling, have added almost 12 percent to the price of a barrel of crude oil.

There was no damage to Ras Tanura, but the attack sent Brent crude briefly above $70 a barrel.

The six-year war in Yemen, where Saudi Arabia is leading a coalition of countries fighting the Iran-backed Houthis, has seen a number of attacks on the Kingdom’s energy infrastructure and oil tankers in the Red Sea and the Persian Gulf.

Indeed, a report last month by a respected Washington-based think tank, the Center for Strategic and International Studies, said Houthi attacks on Saudi Arabia more than doubled during the first nine months of 2021 compared to the same period a year earlier. The report said Iran’s Islamic Revolutionary Guard Corps and Lebanese militia Hezbollah played a critical role in providing Houthis with weapons, technology and training.

Concerns about potential disruptions to Saudi output on prices should also be coupled with the unlikelihood of any easing of sanctions against Iran — a huge crude producer, but one whose meager exports are now reliant on smuggling.

Fast forward to today, and the bloody unrest in Kazakhstan — an OPEC+ member and second largest oil producer in the former Soviet Union with almost 2 million barrels a day — had already pushed Brent almost 5 percent higher in the early days of this month, to $83. Ironically, the initial protests against the government were sparked by an increase in the price of liquid petroleum gas, which many Kazakhs use to run their cars.

The UAE attack, which has nudged Brent a little closer towards Goldman Sachs’ $90, is the most significant strike by Houthis against the Emirates since its military withdrawal from the Yemen conflict in 2019, though it still supports forces fighting the Houthis.

Meanwhile, the buildup of Russian troops on Ukraine’s border and fears that Vladimir Putin will invade, unleashing a NATO response of economic sanctions, or in a worse case scenario, a wider conflict, are sending prices higher still.

Tensions linked to Gazprom’s Nord Stream 2 pipeline project have already played a large role in rocketing gas prices across Europe. Gas prices have fallen sharply so far this year, but Ukraine is a vital supply route for Russian oil and gas supplies to Europe, which is heavily dependent on Russia for its energy needs.

Giovanni Staunovo, energy strategist with UBS, said: “There is probably also a geopolitical risk premium related to tensions in Eastern Europe and the Middle East, which is however difficult to quantify. Historically, such risk premia only remained in the price if those tensions triggered some supply disruptions. That said, currently there are no disruptions.”

A more pertinent risk for oil prices perhaps lies in the fundamentals of the market, primarily concerns about OPEC’s ability to pump more crude if required by higher demand. Several OPEC members have struggled to raise output to required quota levels, and speaking this week, Saudi Arabia Energy Minister Prince Abdulaziz bin Salman said the Kingdom had no plans to make up for their production shortfalls.

Staunovo said: “Some oil demand concerns related to the omicron variant have not materialized, with oil demand holding up better than some feared back in December. But the oil market is tight, with petroleum inventories, and crude and oil products, standing at a multi-year low, and if oil demand keeps recovering back to 2019 levels, available spare capacity should also fall to low levels, which makes the oil market and prices very sensitive to any supply disruptions.”