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Home » Libya » Joint Communique on Libya

Libya Oil Output Tumbles as Protests Spread Westward

By Maher Chmaytelli – Aug 27, 2013

Libyan oil production fell to one-eighth of its capacity as protests over pay and allegations of corruption spread to fields operated by Eni SpA (ENI) and Repsol SA (REP), executives at the state oil company said.

Protesters yesterday stopped production at Repsol-operated Sharara and Eni-operated El Feel, or Elephant, fields in western Libya, according to National Oil Corp. Director of Measurement Ibrahim Al Awami. Output from the North African nation slumped to about 200,000 barrels a day, compared with 640,000 in August and its optimal capacity of 1.6 million, NOC Chairman Nuri Berruien said today in an interview from Tripoli.

“It may be more just people jumping on the band-wagon, as they see the significant impact of such action,” said Michael Barry, an analyst at Facts Global Energy in London. “But even if it is more spontaneous than planned, there is a worrying momentum developing in eastern areas, which the Tripoli government may be unable to prevent.”

The protests were previously entrenched in the central and eastern regions that produce and export the majority of Libya’s crude, affecting companies such as Royal Dutch Shell Plc, Marathon Oil Corp., Hess Corp. and ConocoPhillips, according to a Bloomberg Industries analysis. Brent crude jumped to the highest level in six months today to trade at about $113.50 a barrel on news of the production cuts and speculation fighting in Syria may escalate.

Force Majeure

Three of Libya’s nine export ports, including Es Sider, the nation’s largest, have been under force majeure since Aug. 18, and a fourth, Hariga, closed since end July. The force majeure, a legal clause that excuses the seller from making deliveries because of events beyond its control, at Brega was lifted on Aug. 22. The others operating are Zawiya, and the offshore loading terminals of Mellitah, Al Jurf and Bouri.

Supply to Zawiya and Mellitah terminals may be disrupted as they receive crude from the Sharara and Elephant respectively, Awami said in an interview today.

“Too many chiefs and not enough soldiers,” Awami said, commenting on the promotion and hiring demands of some of the protesters who shut down the fields in the western region.

The oil ministry has organized visits to Es Sider and Hariga to show the media that every drop of oil is accounted for. Libya, which depends on petroleum sales for 95 percent of its exports, has lost $4.5 billion in energy revenue this year, Berruien said. Deputy Oil Minister Omar Shakmak said yesterday said the country’s export dropped to average 300,000 barrels a day in August.

Source: Bloomberg

Categories: Libya, News, Press

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