BENGHAZI // Libya's state-owned oil firms are firmly in opposition hands and their wells continue to pump out crude, company executives say. But they warn that if the country's unrest continues to disrupt their ability to export, they could run out of places to store the oil as soon as mid-March.
"The fields are still running. The oil output is reduced to 40 per cent of the existing capacity," Yussef Ghorreya, the head of the reservoir department at Agoco, the largest of the state-owned firms, said on Sunday at the company's headquarters in Benghazi.
Before the uprising, Agoco was producing 420,000 barrels a day (bpd), a quarter of the national production of about 1.6 million bpd, most of which was exported to European countries such as Germany, Italy, Spain and France. Output is now about 170,000 bpd, said Mr Ghorreya.
Agoco workers sided with the rebels in the first days of the uprising against Muammar Qaddafi that began on February 17. The company's headquarters remains a hive of activity, unlike much of the city, where most shops and businesses remain shut.
"We formed an emergency committee. Each workers is in charge of something and, in coordination with the youth, we are now securing the oil fields," said Sami Elnemer, who works in Agoco's supply department.
About half of Agoco's 5,700 workers are regularly reporting for work, company executives said, adding that soldiers who have switched sides are helping secure the oil installations across the east.
Four fifths of Libya oil production lies in the east of the country, in the territories held by the rebels. Most of the country's wells are in the desert, southeast of Benghazi, the country's second largest city and the de facto centre of the uprising.
Oil company officials say all the other "liberated" national oil companies operating in the east - Brega Petroleum Marketing Company, Sirte Oil, Zawia Oil Refining Company, Jowef Oil Technology, and Waha Oil Company - are acting independently of the National Oil Company (NOC), the state's umbrella institution for oil firm, which remains loyal to Colonel Qaddafi.
However, the executives say they remain loyal to their country and a part of the Tripoli-based NOC.
The NOC "is in Tripoli, and the capital is under siege", Mr Bulifa said. "We had to take our own decision to keep the fields and the company running because the NOC is still following the old regime and we sided with the people."
Shipping is now the major concern of oil company executives. Agoco officials say one tanker loaded with 700,000 barrels of crude was expected to have left the terminal yesterday at Tobruk, a city held by regime opponents near the Egyptian border.
The European Union's energy commissioner also said yesterday that he had information that Colonel Qaddafi's regime no longer controls most of Libya's oil and gas installations, but ruled out imposing a blockade on oil exports from Libya because the installations are now in rebel hands.
"We would potentially be punishing the wrong people," Gunther Oettinger said in Brussels following a meeting of EU energy ministers.
Yesterday, oil prices darted up above US$99 (Dh363) a barrel in Asia because of disruptions in the world oil market caused by the events in Libya, an Opec member state.
The energy commissioner said the EU had sufficient reserves to make up for the shortfall in Libyan supplies and that the Opec oil cartel as well as Russia were willing to help fill the gap. Libya, a member of the Organisation of the Petroleum Exporting Countries, is the fourth largest oil producer in Africa.
Workers say what has happened during the uprising at Agoco, which was formed in 1971 when the government nationalised British Petroleum, was typical of what took place at other state-owned oil companies in the east. On February 20, the fifth day of the uprising, the company's workers joined the opposition, threw out the top management and formed a new management committee.
"Hassan Bulifa, a member of the Agoco committee, said: We never thought to stop the oil fields. It is in the interest of the entire world to keep them going."
The company's chairman, Abdelwanis Saad, a petroleum engineer appointed by the NOC, was forced to step down.
Mr Saad, standing dressed in a dark blue Agoco rain jacket outside the front gate of his villa in an upmarket neighbourhood known as Dollarat, or Dollars, said he was pushed aside because the workers "want to separate from the NOC and I was representing it".
Three men who worked at Agoco were killed during the uprising. Two of them were shot dead, and one, Mahdi Ziu, a 49-year-old bespectacled man whose picture now adorns every door of the company headquarters, drove a car on February 18 loaded with four propane tanks and makeshift explosives into the gates of a military base.
Mr Ziu rammed the imposing gates, blowing them into a twisted pile of concrete and rebar, dying in the blast, in what his peers considered a defining moment in the battle for the city.
* With additional reporting from Associated Press, Agence France-Press
foreigndesk@thenational.ae
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Name: Kumulus Water
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UAE currency: the story behind the money in your pockets
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