Libya Arrives for OPEC with Exports at a Trickle

Posted by Eric Haun
Monday, June 09, 2014

Libya's attendance at Wednesday's OPEC meeting will be an oddity for historians of the oil exporters club - a member with virtually no oil for sale.

As it struggles with its worst crisis since the 2011 war that toppled Muammar Gaddafi, early talk of a swift resumption of output have given way to pessimism, leaving OPEC with a longer lasting hole of over one million barrels per day in its supply.

Production is below 200,000 barrels per day, Oil Minister Omar Shakmak said on arrival in Vienna on Monday for the meeting, a fraction of the 1.6 million bpd Libya pumped before the 2011 conflict.

"Until the government gets control it cannot export on a normal basis... It is unlikely Libyan oil production will increase significantly in the next six months," said Charles Gurdon, managing director of Menas Consulting.

"Most of 2014 will effectively be written off."

The near absence of Libyan oil from international markets has helped anchor prices in a narrow range around $110 a barrel. That is a comfortable level for OPEC and few expect the cartel to change its output target for the rest of the year.

Rebels have blocked Libya's major ports and fields since last summer, slashing output.

With a renegade general launching war on Islamists, successive prime ministers struggling for legitimacy and a lack of oil revenues, the caretaker government could be forced to divert what barrels were destined for export to domestic refineries to supply gasoline to the capital.

Foreign oil companies have pulled out staff and frozen exploration activities, while Libya's hungry European customers have turned elsewhere for more steady supplies.

Monday's court ruling resolving a standoff between rival governments was welcomed by rebels holding some of Libya's largest oil terminals at Es Sider and Ras Lanuf and raises hopes that a deal to restore key export facilities could be reached soon.

But even if a deal to reopen all the ports and fields is made, industry insiders and officials from Libya's National Oil Corp (NOC) say it is hard to tell how much damage the closures have already caused to its precious oil infrastructure or how long it would take to return to prewar capacity.

Libya's western El Sharara oilfield may take months to reach its full output of 340,000 bpd, for instance, because at least 20 damaged well pumps need to be replaced.

Once output can build up, the damage is taking its toll on the country's production capacity. The International Energy Agency, the West's energy watchdog, in May cut its estimate of Libya's sustainable output capacity to 1 million bpd.

Fires on pipelines elsewhere and lack of maintenance could make resumption of exports a long and costly process.

Technically, Libya can still pump upwards of 1 million bpd but the new NOC chairman Mustafa Sanallah said it would only ramp up exports gradually - and in cooperation with OPEC. That would help avert a sudden slide in oil prices.

"From a technical point of view, our facilities are ready ...and our people can resume production very soon," Sanallah told a Libyan oil conference in London last month.

"But in order to resume production, we have to agree with our rivals, partners and with OPEC. We have still high storage of oil... So we have to export our oil gradually and by good cooperation between Libya and OPEC."

At a London conference last month on on Libya's energy sector presentations focused on plans for a new oil law, enhanced oil recovery and even pipeline upgrades, skirting around the fact that the state could not even guarantee the flow of oil.

"It is a very difficult market to predict," said Eric Oudenot, of Boston Consulting Group. "Nobody is really able to craft a strategy for Libya as it is too unstable."

(By Lin Noueihed and Julia Payne; Additional reporting by Ulf Laessing in Tripoli, Alex Lawler in Vienna; Editing by William Hardy and Veronica Brown)

Maritime Reporter May 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Finance

Vinalines Plans Ports Divestment

The Vietnam National Shipping Lines (Vinalines) and the Ministry of Transport (MOT) hope the plan to reduce the state’s ownership ratio in the big shipping firm

Dubai Establishes Maritime Arbitration Centre

The Dubai Maritime City Authority (DMCA) is in the final stages of completing the rules for the first maritime arbitration centre in the Middles East: the Emirates

Gener8 Maritime to Go Public

Private equity-backed tanker operator Gener8 Maritime filed with the U.S. Securities and Exchange Commission (SEC) to proceed with an initial public offering worth up to $100m.

Energy

DNV GL’s Synergi to Manage Siem Offshore Newbuilding Projects

Siem Offshore has chosen DNV GL’s Synergi Project to manage nine newbuilding projects. Synergi Project software The software is used to optimize the collaboration

Wärtsilä's' Propulsion for Use with US Compliant ELA

Wärtsilä has developed propulsion systems that are capable of operating with Environmentally Acceptable Lubricants (EALs) and comply with the US Vessel General Permit 2013 (VGP-2013).

Solarworld Wants Duties on Chinese Solar Goods in U.S. Extended

German solar manufacturer SolarWorld will apply to the United States for an extension of duties on Chinese panel imports that are due to end this year, weekly Euro am Sonntag said.

News

Dortmund Port's Throughput Up

In 2014, Dortmund’s combined goods throughput on ships and trains amounted to 5.7 million tonnes, compared to 5.3 in the previous year. 2.9 million tonnes (+600,000) of this was ship related.

Baltic Mercur II makes maiden voyage to Antwerp

This week Atlantic Ro-Ro Carriers (ARRC) celebrates the maiden voyage of the Baltic Mercur II via the port of Antwerp as part of their regular transatlantic service to the US Gulf.

USCG Provides Safety Tips to Paddlesports Enthusiasts

As the boating season unofficially begins, the 9th Coast Guard District is reminding paddlesport enthusiasts to take precautions to ensure safe trips and increase

Logistics

Dortmund Port's Throughput Up

In 2014, Dortmund’s combined goods throughput on ships and trains amounted to 5.7 million tonnes, compared to 5.3 in the previous year. 2.9 million tonnes (+600,000) of this was ship related.

Dubai Establishes Maritime Arbitration Centre

The Dubai Maritime City Authority (DMCA) is in the final stages of completing the rules for the first maritime arbitration centre in the Middles East: the Emirates

Gener8 Maritime to Go Public

Private equity-backed tanker operator Gener8 Maritime filed with the U.S. Securities and Exchange Commission (SEC) to proceed with an initial public offering worth up to $100m.

Middle East

Baltic Mercur II makes maiden voyage to Antwerp

This week Atlantic Ro-Ro Carriers (ARRC) celebrates the maiden voyage of the Baltic Mercur II via the port of Antwerp as part of their regular transatlantic service to the US Gulf.

WFP: Aid Cargo for Yemen will be Delivered After Ship Docks

The World Food Programme will deliver a cargo of Iranian aid for Yemen once the ship carrying it reaches Djibouti's port, the U.N agency said on Friday. Earlier

Iran Aid Ship Reaches Djibouti Waters, Waits to Enter Port

An Iranian aid ship has reached the outskirts of Djibouti's port and is waiting for a permit to enter after Tehran agreed to an international inspection of the vessel with goods for Yemen,

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Pipelines Pod Propulsion Port Authority Salvage Ship Electronics Ship Simulators Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2278 sec (4 req/sec)