Libya Oil Production
Posted: Thu Nov 13, 2014 2:13 pm
WASHINGTON — The stunningly improbable return of oil production in Libya, right in the middle of a civil war, is one of the reasons crude prices have been tumbling. But now this Libyan crude renaissance looks to be ebbing -- with potentially nasty consequences for Libya and a fresh dose of uncertainty for an already rattled oil market.
The latest development is an armed struggle for control of Libya's biggest oil field, El Sharara, in the country's south. Reuters reported that an armed group linked to the rebel government in Tripoli stormed the field last week, marking the first time that the breakaway government sought control of the country's oil resources.
On Monday, that militia appeared to have control of the field; even so, Libya's National Oil Corp. hoped to restart production this week. In the meantime, that struggle disrupted the power supply to another nearby oil field, taking it offline too. Together, those losses have temporarily cut Libya's precarious oil output by about 300,000 barrels a day. Back in the summer -- during an apparent high-water mark -- Libya was pumping as many as 900,000 barrels daily.
Fresh protests in an eastern Libyan port are disrupting oil exports there, further complicating matters.Libya's oil miracle looks like the latest victim of the factional violence that has rent the country to pieces since the 2011 uprising and fall of former dictator Moammar Gadhafi. Libya's civil war has spawned rival governments, each with its own loyal militias. On Wednesday, car bombs ripped through cities in eastern Libya, including Tobruk. To make matters worse, last week the Libyan Supreme Court in Tripoli declared the exiled, internationally recognized parliament in Tobruk illegal, sowing further political uncertainty that could worsen conditions for Libya's oil industry.
"I think the real anomaly was Libya producing 800,000 to 900,000 barrels a day," said Geoff Porter, director of North Africa Risk Consulting. "The insecurity before didn't jibe with the increased and sustained production. Now, the wild swings of oil production seem to be more in line with the political chaos and the indeterminate security situation," he added.But it's unclear just how much the factional fighting will hurt Libya's oil industry, as there are no reliable estimates on current production. Before the 2011 uprising, Libya produced about 1.6 million barrels a day. This year, amid standoffs between rival factions, Libya's output dropped to as little as 100,000 barrels.A sudden and stunning recovery followed. OPEC figures that Libya, a core member of the oil-exporting cartel, produced more than 750,000 barrels daily in September and may have pumped almost 850,000 barrels a day in October. Some estimates put Libyan output even higher.That doesn't seem to be the case today.
National Oil Corp. insiders just told Platts, the energy-market experts, that production has plummeted to 540,000 barrels. But even that figure doesn't really add up: Libya doesn't seem to be exporting anywhere near what it claims to be producing. Also, its domestic refining industry is too small to be eating the difference. - See more at: http://readingeagle.com/ap/article/liby ... lnxPh.dpuf
The latest development is an armed struggle for control of Libya's biggest oil field, El Sharara, in the country's south. Reuters reported that an armed group linked to the rebel government in Tripoli stormed the field last week, marking the first time that the breakaway government sought control of the country's oil resources.
On Monday, that militia appeared to have control of the field; even so, Libya's National Oil Corp. hoped to restart production this week. In the meantime, that struggle disrupted the power supply to another nearby oil field, taking it offline too. Together, those losses have temporarily cut Libya's precarious oil output by about 300,000 barrels a day. Back in the summer -- during an apparent high-water mark -- Libya was pumping as many as 900,000 barrels daily.
Fresh protests in an eastern Libyan port are disrupting oil exports there, further complicating matters.Libya's oil miracle looks like the latest victim of the factional violence that has rent the country to pieces since the 2011 uprising and fall of former dictator Moammar Gadhafi. Libya's civil war has spawned rival governments, each with its own loyal militias. On Wednesday, car bombs ripped through cities in eastern Libya, including Tobruk. To make matters worse, last week the Libyan Supreme Court in Tripoli declared the exiled, internationally recognized parliament in Tobruk illegal, sowing further political uncertainty that could worsen conditions for Libya's oil industry.
"I think the real anomaly was Libya producing 800,000 to 900,000 barrels a day," said Geoff Porter, director of North Africa Risk Consulting. "The insecurity before didn't jibe with the increased and sustained production. Now, the wild swings of oil production seem to be more in line with the political chaos and the indeterminate security situation," he added.But it's unclear just how much the factional fighting will hurt Libya's oil industry, as there are no reliable estimates on current production. Before the 2011 uprising, Libya produced about 1.6 million barrels a day. This year, amid standoffs between rival factions, Libya's output dropped to as little as 100,000 barrels.A sudden and stunning recovery followed. OPEC figures that Libya, a core member of the oil-exporting cartel, produced more than 750,000 barrels daily in September and may have pumped almost 850,000 barrels a day in October. Some estimates put Libyan output even higher.That doesn't seem to be the case today.
National Oil Corp. insiders just told Platts, the energy-market experts, that production has plummeted to 540,000 barrels. But even that figure doesn't really add up: Libya doesn't seem to be exporting anywhere near what it claims to be producing. Also, its domestic refining industry is too small to be eating the difference. - See more at: http://readingeagle.com/ap/article/liby ... lnxPh.dpuf