Unrest sees Libyan oil output cut in half

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IOL Business turks March1 2011 REUTERS The Turkish navy personnel carrier TCG Iskenderun takes civilians home yesterday as part of Turkey's evacuation efforts from Libya. Other nations are evacuating their citizens and oil companies are pulling staff out as the situation continues to worsen. Photo: Reuters.

The unrest in Libya has cut the country’s oil output by half, more than it initially estimated, the International Energy Agency (IEA) said yesterday.

Foreign firms have been pulling staff out of Libya due to the uprising against Muammar Gaddafi’s rule.

China’s three major state-owned oil and gas companies had evacuated all their employees, the companies said.

About half of the world’s 12th largest exporter’s 1.6 million barrels per day (bpd) of production had been cut, IEA chief economist Fatih Birol said, citing industry reports.

Benchmark Brent crude prices jumped towards $120 a barrel last week for the first time since 2008 because of the disruption in Libya. Prices have since eased to $112, partly because top world exporter Saudi Arabia has promised to meet any shortages.

“This is not good news for suppliers in the market but at the same time it is very comforting that Saudi Arabia showed their readiness to make up (supplies),” Birol said.

He added there was a major risk of derailment for the global economic recovery if prices remained at current levels for the rest of the year.

The country’s crude oil exports and oil tanker loadings remained disrupted yesterday, keeping the bulk of Libya’s 1.3 million bpd of exports off the market.

The exact scale of the cut in Libya’s oil output remains unclear, partly because of disrupted communications links with the country.

Libyan oil officials have been mostly unavailable for comment, but one said on Sunday that the Hamada field had ceased production and the eastern fields of Sarir, Nafoora and Misla were producing at about half their normal capacity.

“Right now, the production is minimal, possibly 20 000 bpd,” said a spokesman for the Arabian Gulf Oil Company, referring to the Nafoora field.

Among the highest estimates of the Libyan outage came from Italian oil company Eni, which last week said that Libya’s oil output had been slashed by 1.2 million bpd, or 75 percent.

Meanwhile, Sapa-AFP reports that the EU yesterday agreed to slap an asset freeze and travel ban on Gaddafi and 25 members of his family and inner circle, officials said.

Speaking in Geneva, the EU’s foreign policy chief, Catherine Ashton, said the brutality of the regime called for an immediate response.

“What is going on – the massive violence against peaceful demonstrators – shocks our conscience,” she said. “It should spring us into action.”

The sanctions decided by the 27-nation bloc will come into force within several days. – Reuters


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