The temporary closure of Libya’s largest oilfield this month following protests underlines the lingering shadow of political instability on the North African country’s embattled oil and gas industry.
The Sharara oilfield, with a capacity of 300,000 barrels per day, was shut down on January 7 following protests by residents demanding better infrastructure and economic opportunities.
Libya's state-owned National Oil Corporation (NOC) announced the resumption of operations at the facility on Sunday.
The field represents roughly a fourth of the country’s total output of about 1.2 million barrels per day.
Such protests, which target the country's vital oil infrastructure, may affect the Opec member’s ability to meet its lofty production target and grow its gross domestic product over the next few years, according to analysts.
Despite having Africa’s largest crude reserves, a third of Libya’s population lives below the poverty line and parts of the country suffer chronic shortages of petrol and gas due to inadequate investment in pipelines and refining capabilities.
“Considering that the Sharara oilfield is the largest one in Libya, recovering or falling production from that field has a big impact on revenues of the NOC,” Giovanni Staunovo, a strategist at Swiss bank UBS told The National.
“International oil companies (IOCs) are likely [to have] a cautious approach in respect to returning to the country considering the political instability and risk of production disruptions,” he said.
Last week, the country's oil minister said that the continued shutdown of the key oilfield could potentially impact the nation's GDP and undermine Libya's reputation as a reliable energy supplier.
“We believed the country had achieved stability, and customers had confidence in receiving consistent oil quantities. Losing customers is a real risk, jeopardising the future for everyone,” Mohamed Oun told reporters at an event in Tripoli.
“It's crucial for people in Libya to understand that the NOC and the Ministry of Oil and Gas are primarily focused on oil and gas exploration, extraction, production, and contributing revenue to the country's state treasury,” he said.
The last time Libya suffered a major supply disruption was in 2022.
Military commander Field Marshal Khalifa Haftar, whose forces control the oil-rich eastern Libya, orchestrated a blockade on fields and ports that year, prompting NOC to declare force majeure for exports.
The blockade was lifted following the appointment of Farhat Bengdara as NOC chairman.
Political tangle
Libya has remained divided since the civil war that ensued following the 2011 revolution.
The western part of the country is governed by the internationally recognised administration known as the Government of National Unity (GNU), which was established through a UN-led political process ahead of elections scheduled for December 2021.
However, these elections did not take place, leading to challenges from opponents questioning the legitimacy of the GNU's authority.
In the eastern region, a rival government called the Government of National Stability emerged in March 2022, taking control of about three-quarters of the country's oil production capacity.
NOC, which restored its output to 1.2 million bpd last year, said in October that it planned to increase its crude production to 2 million bpd over the next three to five years.
The state-run energy company, seeking to reactivate old oil wells and launch fresh exploration activity, aims to bring in IOCs.
Mr Bengdara has indicated that the planned output increase would necessitate $17 billion in investments across 45 projects.
“[It is] a huge commitment for IOCs when it comes to Libya, considering the unstable atmosphere,” Rystad Energy said.
“Additionally, Libya currently still has two parallel governments with no centralised decision-making body, making announcements such as elections potential triggers that could once again lead to production losses,” the Norway-based consultancy said.
Rystad Energy expects Libya to reach a production level of 1.4 million bpd by 2027 in its base case scenario and 1.8 million bpd in its high case scenario.
Wood Mackenzie said the target of 2 million bpd would not be reached even in the US-based consultancy’s most bullish case.
“The spectre of oil production shut-ins continues to hang over Libya. And alongside outages from ageing infrastructure, investment will remain too low to achieve significant increases in the short to medium term,” Wood Mackenzie said in November.
“If Libya can improve security and fiscal terms, then there is significant longer-term upside,” it said.
Before the protests this month, there had been renewed interest from energy companies in the country’s oil and gas industry.
Last year, Eni, BP and Algerian energy company Sonatrach announced the resumption of their operations in the country after a 10-year absence.
In January 2023, Eni and NOC signed an $8 billion gas production deal, which could result in a production of up to 760 million cubic feet of gas.
Libya is set to conduct a licensing round in the fourth quarter of this year, its first in almost two decades.
Banking on oil
Crude oil and natural gas export revenue account for a significant part of Libya’s economy.
In 2021, oil revenue accounted for 56.4 per cent of the country’s GDP, compared with 42.8 per cent for Iraq and 23.7 per cent for Saudi Arabia, the world’s largest oil exporter, the World Bank said.
For Nigeria, Africa’s largest crude exporter, oil revenue only made up 6.2 per cent of its GDP in 2021.
Libya's real GDP is projected to rise by 7.5 per cent this year, after growing an estimated 12.5 per cent in 2023, the International Monetary Fund said. Its economy contracted by 9.6 per cent in 2022.
Following the devastating floods that hit the country in September last year, the IMF said Libya’s medium-term economic outlook remained positive due to high oil prices.
The floods in Libya inundated about a quarter of the city of Derna after torrential rain from Storm Daniel caused two dams to collapse near the eastern port city.
However, it did not disrupt the country’s crude output.
Libya plans to increase its GDP to about $250 billion and have oil and gas as 40 per cent of the economy, Economy Minister Mohamed Al Hwej said during the Tripoli event last week. He did not provide a timeline or any further details.
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Key facilities
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5) Don't be rushed into a sale
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Yadoo’s House Restaurant & Cafe
For the karak and Yoodo's house platter with includes eggs, balaleet, khamir and chebab bread.
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'Saand Ki Aankh'
Produced by: Reliance Entertainment with Chalk and Cheese Films
Director: Tushar Hiranandani
Cast: Taapsee Pannu, Bhumi Pednekar, Prakash Jha, Vineet Singh
Rating: 3.5/5 stars
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ICC men's cricketer of the year
2004 - Rahul Dravid (IND) ; 2005 - Jacques Kallis (SA) and Andrew Flintoff (ENG); 2006 - Ricky Ponting (AUS); 2007 - Ricky Ponting; 2008 - Shivnarine Chanderpaul (WI); 2009 - Mitchell Johnson (AUS); 2010 - Sachin Tendulkar (IND); 2011 - Jonathan Trott (ENG); 2012 - Kumar Sangakkara (SL); 2013 - Michael Clarke (AUS); 2014 - Mitchell Johnson; 2015 - Steve Smith (AUS); 2016 - Ravichandran Ashwin (IND); 2017 - Virat Kohli (IND); 2018 - Virat Kohli; 2019 - Ben Stokes (ENG); 2021 - Shaheen Afridi
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The five pillars of Islam
Defence review at a glance
• Increase defence spending to 2.5% of GDP by 2027 but given “turbulent times it may be necessary to go faster”
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• Number of active reserves should be increased by 20%
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Specs
Engine: 51.5kW electric motor
Range: 400km
Power: 134bhp
Torque: 175Nm
Price: From Dh98,800
Available: Now
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Normcore explained
Something of a fashion anomaly, normcore is essentially a celebration of the unremarkable. The term was first popularised by an article in New York magazine in 2014 and has been dubbed “ugly”, “bland’ and "anti-style" by fashion writers. It’s hallmarks are comfort, a lack of pretentiousness and neutrality – it is a trend for those who would rather not stand out from the crowd. For the most part, the style is unisex, favouring loose silhouettes, thrift-shop threads, baseball caps and boyish trainers. It is important to note that normcore is not synonymous with cheapness or low quality; there are high-fashion brands, including Parisian label Vetements, that specialise in this style. Embraced by fashion-forward street-style stars around the globe, it’s uptake in the UAE has been relatively slow.
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Zayed Sustainability Prize
What should do investors do now?
What does the S&P 500's new all-time high mean for the average investor?
Should I be euphoric?
No. It's fine to be pleased about hearty returns on your investments. But it's not a good idea to tie your emotions closely to the ups and downs of the stock market. You'll get tired fast. This market moment comes on the heels of last year's nosedive. And it's not the first or last time the stock market will make a dramatic move.
So what happened?
It's more about what happened last year. Many of the concerns that triggered that plunge towards the end of last have largely been quelled. The US and China are slowly moving toward a trade agreement. The Federal Reserve has indicated it likely will not raise rates at all in 2019 after seven recent increases. And those changes, along with some strong earnings reports and broader healthy economic indicators, have fueled some optimism in stock markets.
"The panic in the fourth quarter was based mostly on fears," says Brent Schutte, chief investment strategist for Northwestern Mutual Wealth Management Company. "The fundamentals have mostly held up, while the fears have gone away and the fears were based mostly on emotion."
Should I buy? Should I sell?
Maybe. It depends on what your long-term investment plan is. The best advice is usually the same no matter the day — determine your financial goals, make a plan to reach them and stick to it.
"I would encourage (investors) not to overreact to highs, just as I would encourage them not to overreact to the lows of December," Mr Schutte says.
All the same, there are some situations in which you should consider taking action. If you think you can't live through another low like last year, the time to get out is now. If the balance of assets in your portfolio is out of whack thanks to the rise of the stock market, make adjustments. And if you need your money in the next five to 10 years, it shouldn't be in stocks anyhow. But for most people, it's also a good time to just leave things be.
Resist the urge to abandon the diversification of your portfolio, Mr Schutte cautions. It may be tempting to shed other investments that aren't performing as well, such as some international stocks, but diversification is designed to help steady your performance over time.
Will the rally last?
No one knows for sure. But David Bailin, chief investment officer at Citi Private Bank, expects the US market could move up 5 per cent to 7 per cent more over the next nine to 12 months, provided the Fed doesn't raise rates and earnings growth exceeds current expectations. We are in a late cycle market, a period when US equities have historically done very well, but volatility also rises, he says.
"This phase can last six months to several years, but it's important clients remain invested and not try to prematurely position for a contraction of the market," Mr Bailin says. "Doing so would risk missing out on important portfolio returns."
What is a rare disease?
A rare disease is classified as one that affects a small percentage of the population. More than 7,000 diseases are identified as rare and most are genetic in origin. More than 75 per cent of rare genetic diseases affect children.
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Killing of Qassem Suleimani
The specs
Engine: Four electric motors, one at each wheel
Power: 579hp
Torque: 859Nm
Transmission: Single-speed automatic
Price: From Dh825,900
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Favourite book: Homegoing by Yaa Gyasi
Favourite holiday destination: Spain
Favourite film: Bohemian Rhapsody
Favourite place to visit in the UAE: The beach or Satwa
Children: Stepdaughter Tyler 27, daughter Quito 22 and son Dali 19
How to watch Ireland v Pakistan in UAE
When: The one-off Test starts on Friday, May 11
What time: Each day’s play is scheduled to start at 2pm UAE time.
TV: The match will be broadcast on OSN Sports Cricket HD. Subscribers to the channel can also stream the action live on OSN Play.
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Paltan
Producer: JP Films, Zee Studios
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GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
Six large-scale objects on show
- Concrete wall and windows from the now demolished Robin Hood Gardens housing estate in Poplar
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- Frank Lloyd Wright’s 1930s Kaufmann Office
- A full-scale Frankfurt Kitchen designed by Margarete Schütte-Lihotzky, which transformed kitchen design in the 20th century
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Engine: 2.0-litre 4-cyl, 48V hybrid
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Power: 325bhp
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COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
Mohammed bin Zayed Majlis
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Friday February 18: v Ireland
Saturday February 19: v Germany
Monday February 21: v Philippines
Tuesday February 22: semi-finals
Thursday February 24: final
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THE BIO
Bio Box
Role Model: Sheikh Zayed, God bless his soul
Favorite book: Zayed Biography of the leader
Favorite quote: To be or not to be, that is the question, from William Shakespeare's Hamlet
Favorite food: seafood
Favorite place to travel: Lebanon
Favorite movie: Braveheart
The Perfect Couple
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Creator: Jenna Lamia
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Spider-Man: No Way Home
Director: Jon Watts
Stars: Tom Holland, Zendaya, Jacob Batalon
Rating:*****
Ticket prices
General admission Dh295 (under-three free)
Buy a four-person Family & Friends ticket and pay for only three tickets, so the fourth family member is free
Buy tickets at: wbworldabudhabi.com/en/tickets
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• Met Donald Trump at the White House and received his backing.
Business Insights
- As per the document, there are six filing options, including choosing to report on a realisation basis and transitional rules for pre-tax period gains or losses.
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TOUCH RULES
Touch is derived from rugby league. Teams consist of up to 14 players with a maximum of six on the field at any time.
Teams can make as many substitutions as they want during the 40 minute matches.
Similar to rugby league, the attacking team has six attempts - or touches - before possession changes over.
A touch is any contact between the player with the ball and a defender, and must be with minimum force.
After a touch the player performs a “roll-ball” - similar to the play-the-ball in league - stepping over or rolling the ball between the feet.
At the roll-ball, the defenders have to retreat a minimum of five metres.
A touchdown is scored when an attacking player places the ball on or over the score-line.
Why seagrass matters
- Carbon sink: Seagrass sequesters carbon up to 35X faster than tropical rainforests
- Marine nursery: Crucial habitat for juvenile fish, crustations, and invertebrates
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Dust and sand storms compared
Sand storm
- Particle size: Larger, heavier sand grains
- Visibility: Often dramatic with thick "walls" of sand
- Duration: Short-lived, typically localised
- Travel distance: Limited
- Source: Open desert areas with strong winds
Dust storm
- Particle size: Much finer, lightweight particles
- Visibility: Hazy skies but less intense
- Duration: Can linger for days
- Travel distance: Long-range, up to thousands of kilometres
- Source: Can be carried from distant regions
North Pole stats
Distance covered: 160km
Temperature: -40°C
Weight of equipment: 45kg
Altitude (metres above sea level): 0
Terrain: Ice rock
South Pole stats
Distance covered: 130km
Temperature: -50°C
Weight of equipment: 50kg
Altitude (metres above sea level): 3,300
Terrain: Flat ice
The specs
Engine: 2.0-litre turbo 4-cyl
Transmission: eight-speed auto
Power: 190bhp
Torque: 300Nm
Price: Dh169,900
On sale: now
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Mica
Director: Ismael Ferroukhi
Stars: Zakaria Inan, Sabrina Ouazani
3 stars
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Getting there
Flydubai flies direct from Dubai to Tbilisi from Dh1,025 return including taxes
Zakat definitions
Zakat: an Arabic word meaning ‘to cleanse’ or ‘purification’.
Nisab: the minimum amount that a Muslim must have before being obliged to pay zakat. Traditionally, the nisab threshold was 87.48 grams of gold, or 612.36 grams of silver. The monetary value of the nisab therefore varies by current prices and currencies.
Zakat Al Mal: the ‘cleansing’ of wealth, as one of the five pillars of Islam; a spiritual duty for all Muslims meeting the ‘nisab’ wealth criteria in a lunar year, to pay 2.5 per cent of their wealth in alms to the deserving and needy.
Zakat Al Fitr: a donation to charity given during Ramadan, before Eid Al Fitr, in the form of food. Every adult Muslim who possesses food in excess of the needs of themselves and their family must pay two qadahs (an old measure just over 2 kilograms) of flour, wheat, barley or rice from each person in a household, as a minimum.
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