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Egypt Launches Airstrike in Libya Against ISIS Branch

CAIRO — Egypt conducted an airstrike against an Islamist stronghold in Libya on Monday in retaliation for the beheading of at least a dozen Egyptian Christians by a local franchise of the Islamic State, in Cairo’s deepest reach yet into the chaos that has engulfed its neighbor. Hinting at possible further action, President Abdel Fattah el-Sisi of Egypt said in a statement that he had convened “a continuous session” of his National Defense Council to monitor events in Libya and to weigh additional measures. But the strike itself, hitting in the Libyan town of Derna at dawn, was a new turn in the breakdown of regional order in the aftermath of the Arab Spring revolts and the Islamic State’s emergence. Nearly three and a half years after the ouster of Col. Muammar el-Qaddafi, two rival coalitions of militias are battling for control over Libya and its vast resources, including […]

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Libya’s Chaos Puts Neighbors on Alert as Italy Weighs Action

Destroyed buildings seen after Egypt’s army warplanes carried out airstrikes in neighboring Libya against targets belonging to the Islamic State of Iraq and the Levant (ISIL) militant group in Derna, Libya, on Feb. 16. Photographer: Jawhar Ali/Anadolu Agency/Getty Images (Bloomberg) — The beheading of 21 Egyptian Christians by Islamic State’s affiliate in Libya is giving impetus to calls for broader military action against Islamist militants in the oil-rich country. Egyptian President Abdel-Fattah El-Sisi, whose air force bombed Islamic State targets in Libya on Monday, said his country will ask the United Nations Security Council to authorize intervention in the North African nation. Italy, Libya’s former colonial ruler, said it would consider sending a force under a UN mandate. The Egyptian military also deployed soldiers at home to “secure vital institutions and installations,” it said in a statement. Tunisia, Libya’s western neighbor, said helicopters and fighter jets were conducting reconnaissance […]

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Oil supply from Libya’s Sarir to Hariga halted after pipeline attack

London (Platts)–16Feb2015/747 am EST/1247 GMT Crude production at Libya’s major Sarir field has been halted following an attack by saboteurs on the pipeline linking the field with the port of Marsa el-Hariga in eastern Libya, bringing the country’s remaining onshore oil production almost to a complete standstill. The loss of Sarir output means Libyan production will now likely have fallen below 150,000 b/d and exports from its onshore terminals effectively halted. Production had already fallen to around 350,000 b/d in early 2014 — less than one third of the country’s capacity of around 1.5 million b/d — due to fighting near key oil infrastructure and attacks on fields, terminals and pipelines. Output continues from the offshore El Jurf and Bouri fields, which have been unaffected by the recent unrest across mainland Libya, at an estimated 100,000 b/d. The latest attack near Sarir occurred early Saturday and resulted in a […]

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Blaze extinguished at Libya’s largest oil field

Blaze at Libyan oil field extinguished, the terrorists concerns spreading in the country. UPI/Tariq AL-hun. Though flames are out at a pipeline from its largest oil field, the Egyptian bombing of Islamic State targets in Libya show terrorists are gaining ground. The fire that resulted from the militant bombing of a pipeline at the Sarir oil field, the largest in Libya, was extinguished during the weekend. Sarir is in the same region as oil fields attacked last week by fighters claiming loyalty to the group calling itself the Islamic State. Libya before NATO-led forces intervened during civil war in 2011 was producing around 1.2 million barrels of oil per day. The Organization of Petroleum Exporting Countries in its latest monthly report said member-state Libya was producing around 343,000 bpd as of January, a 27 percent decline from December. Sarir was producing around 185,000 bpd. Libyan production declines since the […]

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Italy Mulls Intervention in Libya to Halt Islamic State

A relative of one of the Egyptian Coptic Christians purportedly murdered by Islamic State group militants in Libya reacts after hearing the news in the village of Al-Awar in Egypt’s southern province of Minya, on Feb. 16, 2015. Photographer: Mohamed El-Shahed/AFP via Getty Images (Bloomberg) — Italy’s government will brief parliament this week on the deteriorating situation in Libya as Prime Minister Matteo Renzi considers military intervention to halt the advance of Islamic State on his Mediterranean doorstep. Italy is ready to send more than 5,000 soldiers under a United Nations mandate to stop Islamic State, “which is now 350 kilometers from our shores,” Foreign Minister Roberta Pinotti said in an interview published Sunday in newspaper Il Messaggero. “We’ve been discussing it for months, but now the need for intervention has become urgent.” A power struggle between Islamists and the elected Libyan government has divided the country, driving it […]

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Iran Oil Ministry Faces Cash Emergency Amid Crude-Price Drop

(Bloomberg) — The Iranian oil ministry won’t be able to pay staff or invest in boosting production if parliament proceeds with a plan to slash funding, according to Oil Minister Bijan Namdar Zanganeh. “The oil industry’s situation is deplorable,” Zanganeh said in comments reported by the state-run Islamic Republic News Agency. A draft bill reviewed by parliament Monday would cut the ministry’s budget to $3 billion in the Iranian year that begins March 21. That’s down from $13 billion a year earlier. “This ministry will face problems in meeting the salaries of its staff let alone investing in joint oil and gas fields,” Zanganeh said. “How are we to manage the oil industry with such an amount?” Iran, whose crude exports are banned in Europe because of a dispute over the country’s nuclear program, revised its budget last month to assume a base price for oil of $40 a […]

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Iran sees oil investments dwindling

Iran’s Supreme Leader Ali Khamenei allegedly reaching out to Western powers in a sign of thaw. File Photo by Leader.ir/UPI The minister addressed lawmakers Monday to discuss budgetary strains resulting in part from a weak crude oil market. Already, the Iranian oil sector saw investments fall from $21 billion in 2012 to $17 billion in 2013. "With this trend, investment from our own resources will be nil next year," he said. The budget for the current Iranian year, which ends mid-March, relies on oil for 39.3 percent of government revenues. Drafts for next year call for a 6 percent decline in oil dependency. The oil minister said lawmakers are preparing for oil priced at around $40 per barrel. When oil was around $100 per barrel, the oil ministry’s share of the budget was $13 billion, but the slump could mean a 75 percent decline. "The petroleum industry needs financial […]

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Saudi Aramco Sadara Chemical Plant Will Start Output in 2015

(Bloomberg) — Saudi Arabian Oil Co. and its partner Dow Chemical Co. plan to start production this year at their $20 billion Sadara chemicals joint venture as other projects being planned in the region face the obstacle of falling crude prices. Ethylene and polyethylene will be the first products of Sadara Chemical Co., Khalid Al Hamid, manager for engineering and technology, said in Dubai. Full output is set for late 2017. Saudi Arabia, the world’s largest crude exporter, started the petrochemical project in 2011 when oil averaged $111 a barrel. Prices have since slumped about 45 percent. Qatar Petroleum and Royal Dutch Shell Plc ended plans last month to build a $6.5 billion petrochemical plant, saying it was “commercially unfeasible” in the current energy market. “Middle East chemicals projects are facing stiff review,” Sanjay Sharma, vice president for Middle East and India at Englewood, Colorado-based IHS Inc., said in […]

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Oil’s Black Swans on the Horizon

ENLARGE Next week sees the one-year anniversary of Uber’s ride-sharing service arriving in Riyadh. Disruption is creeping up on Saudi Arabia and the global oil market on which it relies. So far, this has centered on supply: North America’s shale boom has upended expectations of ever-increasing dependence on Middle Eastern crude. But Saudi Arabia’s oil minister, Ali al-Naimi, is also worried about the other side of the equation. At a conference last month, he asked: “Is there a black swan that we don’t know about which will come by 2050 and we will have no demand?” Against the backdrop of oil’s recent plunge, Mr. al-Naimi was thinking of potentially disruptive trends including new technology and efforts to cut carbon emissions. This might seem overdone. Last week, the International Energy Agency released medium-term forecasts showing global oil consumption rising by 6.6 million barrels a day by 2020. Beneath the headline, […]

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Severe Drought Pushes Brazil’s Largest City Toward Water Crisis

SÃO PAULO, Brazil — Endowed with the Amazon and other mighty rivers , an array of huge dams and one-eighth of the world’s fresh water, Brazil is sometimes called the “ Saudi Arabia of water ,” so rich in the coveted resource that some liken it to living above a sea of oil. But in Brazil’s largest and wealthiest city, a more dystopian situation is unfolding: the taps are starting to run dry. As southeast Brazil grapples with its worst drought in nearly a century, a problem worsened by polluted rivers, deforestation and population growth, the largest reservoir system serving São Paulo is near depletion. Many residents are already enduring sporadic water cutoffs, some going days without it. Officials say that drastic rationing may be needed, with water service provided only two days a week. Behind closed doors, the views are grimmer. In a meeting recorded secretly and leaked […]

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