Masoud Suleman, chairman of Libya’s National Oil Corporation (NOC), said the North African country had significant untapped resources and more than 60 discovered oil and gas fields that had yet to be developed. Libya currently produces about 1.4 million bpd and holds Africa’s largest proven crude reserves, estimated at about 48 billion barrels.

The investment drive comes after years of political instability, conflict, export blockades and underinvestment following the 2011 overthrow of Muammar Gaddafi. Libya remains divided between rival authorities in the east and west, while armed groups continue to influence parts of the country. Many of its major oilfields and export terminals are located in areas controlled by eastern military commander Khalifa Haftar.

Security risks remain a major obstacle. A recent drone attack on the Zawiya refinery damaged fuel storage facilities and disrupted operations, while an attack on a nearby power substation caused outages. US company GE suspended work at a nearby power plant and withdrew technical teams because of security concerns.

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The gross profits of Estithmar Holding reached QAR 1 billion, up from QAR 801 million in 2023, reflecting a 27% increase. The company also achieved earnings before interest, tax, depreciation, and amortisation (EBITDA) of QAR 742 million. The results showed a 20% rise in the company’s net profit compared to 2023, reaching QAR 422 million. Earnings per share also increased by 17% from 2023, reaching QAR 0.119 per share.

The 20% growth in net profit is attributed to the increase in the company’s revenues, which were primarily driven by the contracting and healthcare clusters. The contracting cluster expanded by efficiently executing and delivering projects in the Kingdom of Saudi Arabia. The healthcare cluster contributed to the rise in 2024 revenues, driven by the sustainable performance growth of The View Hospital in Qatar and the expansion of the cluster through the subsidiary Apex Health, which signed management and operation agreements for several hospitals. A set of measures taken in the ventures cluster has also contributed to restructuring the business model and increasing revenues.

The financial results for 2024 reported a 25% increase in assets compared to the previous year, resulting from the new projects added to Estithmar Holding’s portfolio, including the Korean Medical Centre in Lusail, the Rixos Baghdad project in Iraq, and the Rosewood Maldives Resort. The results also revealed a current liquidity ratio of 1.22. The Board of Directors of Estithmar Holding recommended a dividend distribution equivalent to 10% of the capital, with one free share for every 10 shares.

The results have demonstrated the holding company’s ability to maintain sustainable growth, enabling it to expand regionally and internationally, supported by the broad trust it has gained from its successful track record across all operational sectors locally. In 2024, Estithmar Holding signed numerous agreements with sovereign wealth funds and regional government entities to transfer its expertise, particularly in healthcare, specialised contracting, services, and real estate development sectors.

The contracting cluster contributed 42% to the company’s revenues in 2024, driven by its notable activity both locally and regionally, especially in Saudi Arabia. The cluster completed several agreements and contracts in 2024, with Elegancia Arabia, one of Estithmar Holding’s companies, participating in major projects such as NEOM, the Red Sea Project, and AMALA, among others.

The services cluster contributed 35% to the company’s revenue. This sector provides services such as facilities management, catering services and solutions, manpower and human resources, and event support, among others. In 2024, the cluster expanded into Iraq and Libya, in addition to its operations in Saudi Arabia and Jordan.

The healthcare cluster, through Estithmar Holding’s subsidiary Apex Health, continued to achieve sustainable growth, driven by the company’s expansion in applying the hospital management and operation model regionally, including in Iraq and Libya. Hospitals in Qatar, including The View Hospital and The Korean Medical Centre, continued to gain trust by adhering to the highest international quality standards, hosting world-class medical professionals, and activating partnerships with leading international medical institutions such as Cedars-Sinai (USA) and Asan Medical Centre (South Korea), among others.

Estithmar Holding’s cluster performed steadily, attributed to the demand for the sector’s projects, including Al Maha Island, which received over 4.7 million visitors in 2024. The year also concluded with a strong finish for the second season of Lusail Winter Wonderland and a successful launch of its third season, attracting thousands of residents and tourists in Qatar. Additionally, the company’s hotel facilities, such as Katara Hills and Maysan Doha Resorts, continued to lead the luxury hospitality sector in Qatar throughout the year.

Similarly, the cluster’s projects outside Qatar have progressed. The Rixos Baghdad project, which features residential apartments and a world-class hotel, made significant progress in its construction phase. The Rosewood Maldives Resort project is also advancing rapidly in terms of completion and is expected to become a prominent tourism destination in the Maldives and globally.

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The Libyan economy, according to Abdulsadek, is largely dependent on oil, which provides over 95% of its total economic output.

“There is momentum in reconstruction and this can only be achieved by increasing the production,” Abdulsadek said, while stating that the objective is to raise it to 2 million barrels per day, not just to 11.6 million. As per the National Oil Corporation (NOC), the current production capacity stands at 1,413,372 barrels per day.

Speaking at the Libya Energy and Economy Summit (LEES) in Tripoli, Abdulsadek stated that the bidding round would comprise 15–21 blocks and three basins, Sirte, Murzuq and Ghadames. According to Farhat Bengdara, the former head of the NOC, the North African country’s last round of bidding for concessions for oil and gas exploration was announced 17 years ago.

Bengdara also stated that more than 65% of Libya’s territorial waters and 70% of its land area remain unexplored. Bengdara resigned, and Masoud Sulaiman, a member of the NOC Board of Directors, took his place.

Abdulsadek clarified that the date for the bid round licensing announcement would be announced following the government of national unity meeting’s approval “because both the oil ministry and NOC have completed their work.”

As “not just to increase the production but to preserve the current production rates,” he stated that the government would collaborate with its partners to supply the USD 3–4 billion.

Turkey’s state-owned Turkish Petroleum Corporation (TPAO) is now ready to invest in Libya’s energy sector, banking on the country’s vast untapped resources, General Manager Ahmet Turkoglu said during the LEES, while attending a panel discussion titled “Libya: At the Nexus of the Global Energy Trade.”

He further underscored TPAO’s renewed interest in Libya as part of its global expansion strategy.

“We are here because we see great potential. I am sure Libya will achieve much more,” Turkoglu said, citing the North African nation’s ambition to boost oil production to 2 million barrels per day. The official further reiterated Ankara’s confidence in Libya’s energy prospects, stating that TPAO is ready to commit significant investments.

Turkoglu also highlighted Libya’s offshore energy sector as a promising area for exploration and development, describing existing fields and brownfields as holding immense opportunities. TPAO is prepared to secure contracts for both new exploration blocks and existing ones to enhance their performance and efficiency.

Turkoglu however, emphasised the importance of competition and transparency in Libya’s energy market to attract foreign investment, while pointing out challenges faced by foreign investors in the North African country, thereby calling for straightforward, competitive, and transparent market access to allow for broader participation and contribution to the nation’s economic growth.

“We need to create a win-win environment where both Libya and investors can thrive,” he said, stressing the need for improved sustainability, predictability, and financial compliance, while expressing optimism about Libya’s energy future, providing a balanced environment benefiting both the country and its investors.

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A weak global economy and soft data from China, the world’s largest oil importer, have caused oil prices to decline along with other asset classes. The October output hikes were planned by eight members of OPEC+, the Organisation of the Petroleum Exporting Countries and its allies led by Russia.

“The eight participating countries have agreed to extend their additional voluntary production cuts of 2.2 million barrels per day for two months until the end of November 2024,” OPEC said, as reported by Reuters.

Brent futures traded above USD 74 before retreating from gains, indicating that the news had increased oil prices by more than USD 1 per barrel. Recently, Brent marked the lowest point of the year.

Due to rising supply outside the group and uncertainty about demand, OPEC+ decided to support the market by raising its October output by 180,000 barrels per day, which is a small portion of the 5.86 million barrels of output it is holding back. This represents roughly 5.7% of global demand.

OPEC+ was scheduled to move forward with the increase. However, the group was concerned about the unstable mood of the oil market due to the possibility of increased supply from OPEC+ and the resolution of the conflict that was preventing Libyan exports, as well as a dimming outlook for demand, according to sources.

On December 1, OPEC+ ministers convene as a full group to decide on policy.

The Joint Ministerial Monitoring Committee, a group of senior OPEC+ ministers with the authority to suggest modifications, meets on October 2.

Recently, oil has been supported by a dispute between rival factions in OPEC producer Libya over control of the central bank, which resulted in a loss of at least 700,000 bpd of production.

However, prices fell by roughly 5% due to reports that a potential agreement to end the conflict was being worked on; however, no agreement to resume exports has been made public.

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Putin said that Moscow will take the lead in monitoring crisis in Libya, Venezuela, and Iran, and their impact on the oil market. Although “there is no crisis in Iran,” there will be “sanctions that limit the country’s markets.”

“This is what I meant by saying that we would closely monitor the situation on the market. If the United States swiftly takes hold of Venezuelan oil reserve and increases accessibility on the world markets, or Libya enters the global market, or someone thinks that it is necessary to stop putting pressure on Iran and Iran enters the market with additional volumes, then we will have to take all this into account and make the appropriate decision,” he said.

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8th July 2014

• Bloomberg Commodity Index falls for second consecutive week
• Oil droops as Iraq fears fade and Libya is poised for export resumption
• Outlook to bumper corn and soybean crops in the US dent prices

Commodities kicked off the second half of 2014 with a mixed performance across some of the major sub-sectors. The Bloomberg Commodity Index (formerly DJ-UBS) nevertheless fell for a second week in a row due to heavy losses in crops, including corn and soybeans, together with soft commodities such as sugar and Arabica coffee. Precious metals were higher despite the adversity stirred up by another strong US jobs number, which strengthened the dollar and sent stocks and bond yields higher.

The energy sector fell for a third consecutive week, as worries related to Iraq faded and two major Libyan export terminals reopened for business after a year-long blockade was lifted.

Industrial commodities, led by nickel and copper, were the major winners with copper seeing a third weekly rise. Continued signs of improved economic growth from the world’s two biggest consumers, China and US, at a time of falling inventories, saw the metal break higher through technical resistance to reach a four-month high.

Palladium at 13-year high

Palladium was another winner as the price rose to a 13-year high on expectations of continued strong demand from car manufacturers at a time of dwindling supplies following a five-month strike in South Africa, the world’s second largest producer after Russia. According to insiders, the supply deficit will rise to a record this year on a combination of strong industrial demand for catalytic converters and investment demand through exchange traded funds backed by the metal, which have risen to new highs.

Rally in cattle futures

Cattle futures in the US continue to rally on short supply with Americans paying the most ever for their Fourth of July holiday barbecue. Texas, the top producing state, and California have seen rising drought problems and this has forced ranchers to reduce herd sizes. In addition, this year’s very cold winter reduced the availability of pastures and forced another herd cull in affected areas.

Appetite for gold

Gold hit a multi-month high during the week as it continued to shrug off the potential price negative news from the US where monthly job creation continues to gather pace leading to speculation about an earlier-than-expected start to the rate tightening cycle.

This week’s strong jobs report saw stocks reach a new record while bond yields and the dollar rose and all of these could eventually obstruct gold’s further progress. But so far the appetite for gold seems to be on the rise with holdings in exchange traded products backed by physical gold seeing a couple of days with healthy inflows, while speculative traders such as hedge funds recently increased their net-long position in gold futures by the most since 2007.

For now, the metal remain range bound between 1300 and 1331 USD/oz; and as traders swap their trading screens for shorts and shades, activity will begin to slow. This is not necessarily something that will bring calm to the market with the average performance of gold during July and August in the past five years showing 3 and 5.5 percent, respectively. A close above 1331 USD/oz could open the way for a move towards 1370 USD/oz followed by the March high at 1392 USD/oz.

Oil slackening

Brent crude and WTI crude oil fell for a second week as the risk of Iraqi oil disruptions faded and, more importantly, news from Libya that two of its major oil terminals are finally going to reopen following a year-long blockade. This shifted the focus somewhat from the risk of supply disruptions, which drove oil prices higher during June, to the potential for increased supplies over the coming months, not least from Libya where the Es Sider and Ras Lanuf ports are once more under government control. These two terminals have a combined capacity to ship up towards of 560,000 barrels per day. The ports handover means that Libyan exports could resume some time in the near future (barring a setback) and exports could rise above 800,000 barrels per day, the highest since July 2013.

As a result of this and increased shipments from the North Sea this July, the front month spread between the first and the second futures month on Brent crude oil has collapsed from 88 cents backwardation (1st month above 2nd month) to flat in just a few weeks. Such an easing of the front month spread does not paint a picture of tight supply and at the same time it has eroded the potential profit being made from the rolling of a record net-long speculative position into a falling backwardation.

Brent crude broke support at 112 USD/barrel and WTI crude at 104 USD/barrel and both are now at risk of a deeper correction towards 109.40 and 103 respectively. Strong seasonal demand from refineries in the US and a renewed inventory reduction at Cushing, the delivery hub for WTI crude, would favor an outperformance of WTI over Brent crude.

Crops plunge

The price of key crops such as corn and soybeans traded on the Chicago Board of Trade (CBOT) plunged on Monday following the release of two reports from the US Department of Agriculture. Both the quarterly stock report and the latest update on planted acreage surprised the markets with the stock report showing domestic stockpiles of grains as being significantly bigger than what was forecast. Soybeans received some additional selling pressure from an upgrade to the planted acreage, which will help remove the tightness that kept prices supported throughout last winter and spring.

Ole Sloth Hansen, Head of Commodity Strategy, Saxo Bank

– See more at: http://www.internationalfinancemagazine.com/article/Oil-dips-gold-resilient-despite-US-economic-cheer.html#sthash.gkjnbQ9W.dpuf

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