Libya parliament passes deal to end central bank crisis
Libya's eastern-based parliament today approved an agreement to resolve a leadership crisis at the central bank, which is likely to lead to a lifting of the country's oil blockade.
The eastern-based House of Representatives and the western-based High Council of State agreed on 26 September a deal to appoint Naji Mohamed Issa Belgasim as governor of the central bank and Marei Muftah Rhayyel Al-Bar'assi as deputy governor.
The leadership of the central bank was thrown into disarray on 18 August when the western-based presidency council attempted to replace long-serving governor Sadiq al-Kabir — a move rejected by the country's eastern-based administration. The eastern-based Libyan National Army (LNA) imposed an oil blockade on 26 August in a bid to starve the western-based government of revenues. This has halved the country's crude output, which Argus estimates at about 500,000 b/d.
The deal to resolve the leadership central bank crisis is likely to see the LNA lift its blockade, although precise timing is unclear. An oil industry source told Argus that he expects it to be this week.
The El Sharara oil field is also likely to restart production when the blockade is lifted, a source told Argus. El Sharara was producing around 260,000-270,000 b/d when it was shut down in early August, in a dispute unrelated to the central bank crisis.
A total lifting of the blockade would restore Libya's crude output to more than 1.2mn b/d.
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PE firm Elliott bids $7.3bn for Citgo assets: Update
PE firm Elliott bids $7.3bn for Citgo assets: Update
Adds reaction from Amber, details throughout. Houston, 27 September (Argus) — An affiliate of private equity group Elliott Investment Management has been selected as the top bidder in an auction for US refiner Citgo, with a bid of $7.286bn. The special master for the auction, being held in the US District Court for the District of Delaware, will need to make a final formal recommendation for the court to choose the Elliott affiliate, Amber Energy, pending a 1 October hearing with parties disputing the auction. But a final hearing to ratify the sale of over 800,000 b/d of refining capacity could be held in November. Final bids for Citgo's US refineries, lubricant plants, midstream and retail assets were submitted on 11 June, with the auction aiming to satisfy debts owed by the company's parent firm, Venezuelan state-owned PdV. If the sale to Amber moves forward following a successful November hearing, it will mark the largest purchase of US refining assets since Andeavor's acquisition by Marathon Petroleum in 2018. "Amber Energy's strategy for growth includes plans to reinvest in the business and potentially pursue strategic investments that enhance the profitability of Citgo," the company said. Citgo was not immediately available for comment. Amber is lead by chief executive Gregory Goff, who was previously chairman, president, and chief executive officer of Andeavor. Company president Jeff Stevens is currently president of Franklin Mountain Energy, which is focused on the Permian basin. He has also been an executive officer of independent refiner and marketer Western Refining. The company plans to keep the Citgo brand, and expects the deal to close by mid-2025. Conditions of the deal include the buyer applying for and acquiring a license from the US Treasury's Office of Foreign Assets Control, because the ultimate owner of Citgo is Venezuelan state-owned PdV, which is subject to US sanctions. "We look forward to partnering with the people of Citgo to ensure that the company continues to operate with the highest standards of safety and reliability," Amber said. Even though it is owned by PdV, Citgo since 2019 has operated under a board appointed by the Venezuelan opposition and vetted by the US government after the US rejected Venezuela's 2018 presidential election as illegitimate. PdV remains under control of President Nicolas Maduro's government. Maduro has rejected the US court proceedings on selling Citgo as "theft" and the issue is likely to feature in his protracted battle with the US-backed opposition, which claims to have defeated Maduro in the July presidential election. The court earlier this year approved a ranking order in which debtors will be paid out of proceeds, rather than allocating them on a pro rata basis. The first in line is defunct Canadian mining firm Crystallex, now owned by New York hedge fund Tenor Capital, with a $990mn claim. ConocoPhillips has a total of three claims approved by court, but only two of those are likely to be satisfied, potentially netting $1.4bn. The next largest is a $1.5bn claim by Russian-Canadian gold miner Rusoro, while energy company Koch's minerals arm is chasing a $457mn claim. Separate US court proceedings involve holders of $3.4bn in PdV 2020 bonds guaranteed by 50.1pc in Citgo Holding — a PdVH-owned legal entity that directly owns Citgo. In theory, the bondholders have the right to be paid first before other claimants are satisfied. The US government has blocked the bondholders' ability to pursue the claim, most recently issuing a ban that is valid until mid-October. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Elliott bids $7.3bn for Citgo assets
Elliott bids $7.3bn for Citgo assets
Houston, 27 September (Argus) — An affiliate of private equity group Elliott Investment Management has been selected as the top bidder in an auction for US refiner Citgo, with a bid of $7.286bn. The special master for the auction, being held in the US District Court for the District of Delaware, will need to make a final formal recommendation the court choose the Elliott affiliate, Amber Energy, pending a 1 October hearing with parties disputing the auction. But a final a hearing to ratify the sale of over 800,000 b/d of refining capacity could be held in November. Final bids for Citgo's US refineries, lubricant plants, midstream and retail assets were submitted on 11 June, with the auction aiming to satisfy debts owed by the company's parent firm, Venezuelan state-owned PdV. If the sale to Amber moves forward, following a successful November hearing, it will mark the largest purchase of US refining assets since Andeavor's acquisition by Marathon Petroleum in 2018. Since 2019 Citgo has operated under a board appointed by the Venezuelan opposition and vetted by the US government after the US rejected Venezuela's 2018 presidential election as illegitimate. But its ultimate parent company, state-owned PdV, remains under control of the Maduro government. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Haftar’s lucrative oil blockade
Haftar’s lucrative oil blockade
The general's eastern power base appears to be benefiting financially, but the country's economy is suffering, writes Aydin Calik London, 27 September (Argus) — Libya's oil blockade has entered its second month with more than half of its typical crude production of 1.2mn b/d off line. Although the UN's Libya mission reports progress in efforts to resolve a leadership crisis at the central bank that sparked the blockade, a workable solution could yet prove elusive. But whether the blockade is lifted in days or endures for weeks, the shutdowns have demonstrated eastern-based general Khalifa Haftar's ability to choke his rivals in the west of oil revenues at little cost to himself. Previous wide-scale blockades instituted by Haftar exacted a heavy toll on both the internationally recognised administration in the west and parallel administrations he has propped up in the east. But this time around, Haftar has managed to design the blockade to avoid the financial and political costs associated with past shutdowns. For one, the current shutdowns at oil fields can only really be described as a partial oil blockade. Libya has exported more than 400,000 b/d of crude so far this month, with almost all of this from eastern terminals where operations were ordered to stop in late August. Argus estimates Opec member Libya's current crude production at about 500,000 b/d. Most of this production is part of state-owned NOC's crude-for-products programme, which feeds a booming fuel-smuggling industry in the east. There has been no let-up here. Imports of refined products this month are at their highest on record at 300,000 b/d, according to Kpler, far beyond Libya's real domestic needs. Some crude is also being exported by eastern-based Libyan firm Arkenu Oil, which analysts suspect was set up to create a direct oil revenue stream independent of the central bank in Tripoli. "The Haftar family has managed the feat of orchestrating an economically lucrative oil blockade," senior fellow at the Atlantic Council Emadeddin Badi says. And some crude output is being kept on line to feed domestic refineries and allow associated gas production to supply power plants. Past blockades have tended to cause power cuts and reduce domestic supplies of diesel and gasoline, putting pressure on Haftar to lift them. But now, he can keep revenue channels open and mostly absolve himself from any backlash resulting from insufficient domestic energy supplies. General practice Haftar's ability to design the blockade to suit his interests partly derives from an informal deal in July 2022 that saw him end a months-long oil blockade in return for installing Farhat ben Gudara as chairman of NOC. In this role, ben Gudara has proven far more co-operative than his predecessor Mustafa Sanalla, who refused to allow Haftar to benefit from any blockade he imposed. That "deal" had underpinned the relative peace between the country's east and west since. If a durable solution to the current leadership crisis at the central bank is to be achieved, a new arrangement between east and west will need to be worked out. Horse-trading behind the scenes continues. "There's still a lot of negotiations to go as far as Libyan politics is concerned," an oil industry source says on the possibility of the blockade being lifted. The longer the central bank crisis persists, the more precarious Libya's economic predicament becomes. Oil revenues that usually flow into the bank have all but stopped and its ability to conduct international financial transactions has been degraded. But even if a resolution is found and oil production returns to normal levels, this would at best represent a fragile and temporary solution to a long-term problem — the lack of a coherent central authority. Worryingly, Libya is a long way from any sort of political process that could heal its divisions. Libya crude production Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US Gulf oil shut-ins drop as Helene nears landfall
US Gulf oil shut-ins drop as Helene nears landfall
New York, 26 September (Argus) — US Gulf of Mexico oil production shut-in levels fell today as Hurricane Helene bore down on Florida's west coast as a category 3 storm, bringing the threat of dangerous storm surge and winds. Around 441,923 b/d of US offshore oil output, or 25pc, was off line as of 12:30pm ET, according to the Bureau of Safety and Environmental Enforcement (BSEE). That is down from 29pc on Wednesday as the eastern Gulf path of the storm took it farther away from most offshore production facilities. About 363.39mn cf/d of natural gas production, or 20pc of the region's output, was also off line today, up from 17pc on Wednesday. Operators have evacuated workers from 27 offshore platforms. Helene was last about 145 miles west-southwest of Tampa, Florida, packing maximum winds of 120mph, according to a 4pm ET advisory from the US National Hurricane Center. Further intensification is likely and Helene could approach the coast at category 4 strength, with winds of at least 130mph. Landfall is expected near Port Leon on Apalachee Bay Thursday evening before Helene is forecast to turn northwestward and slow down over the Tennessee Valley on Friday and into the weekend. Earlier this week, offshore operators including BP, Equinor and Chevron took the precaution of suspending some operations and evacuating workers from offshore facilities in advance of the hurricane. Some facilities have since started back up as the hurricane's track shifted away from the main oil and gas hub in the region. By Stephen Cunningham Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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