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 Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter February 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Finance

Brazil's CEEE to sell stakes in Wind Farms, Dams

Brazil's Companhia Estadual de Energia Elétrica (CEEE), a power utility controlled by the state of Rio Grande do Sul, will sell assets including stakes in wind farms,

DP World Bolsters Investment in India

DP World Pvt. Ltd, the world’s fourth biggest container port operator majority owned by the Dubai government, has plans to invest over $1 billion in India for augmenting its port-related operations.

SunEdison Restrained from 'Unusual' Asset Transfers

Solar company SunEdison Inc said a U.S. court has restrained the company from making any unusual asset transfers until a hearing in a lawsuit brought on by investors

Energy

Libyan Navy Seizes Foreign Tanker

Libyan naval forces have seized a Sierra Leone-flagged oil tanker on suspicion of illegally entering Libyan waters in an attempt to smuggle gasoline, authorities said on Saturday.

Brazil's CEEE to sell stakes in Wind Farms, Dams

Brazil's Companhia Estadual de Energia Elétrica (CEEE), a power utility controlled by the state of Rio Grande do Sul, will sell assets including stakes in wind farms,

Premier Oil and Rockhopper Abandon Ocean Rig Contract

Two of the major British players in Falkland Islands offshore oil development, Premier Oil and Rockhopper Exploration, cancelled a joint venture contract with Ocean Rig UDW.

News

Libyan Navy Seizes Foreign Tanker

Libyan naval forces have seized a Sierra Leone-flagged oil tanker on suspicion of illegally entering Libyan waters in an attempt to smuggle gasoline, authorities said on Saturday.

Berlin film "Fire at Sea" shows Horror of Refugee Crossings

* Movie highlights tragedy of migrant crisis * Filmed mainly on Italian island of Lampedusa * Interleaves lives of islanders with refugees * Film competing for

BRP Wins Industry Award for Rotax Innovation

BRP’s Rotax Intelligent Shift and Throttle (iST) system was recognized by the National Marine Manufacturers Association (NMMA) with an Innovation Award in the Jet

Logistics

Hapag-Lloyd Enhances Conosur Service

Hapag-Lloyd has informed about its service enhancements on the Conosur Service (South America West Coast to South America East Coast). This is being upgraded by

Indiana Ports Sets Cargo Record in 2015

State's three ports handle 12 million tons for first time in 54-year history  INDIANAPOLIS (Feb. 11, 2016) - The Ports of Indiana handled over 12.2 million tons of cargo in 2015,

DP World Bolsters Investment in India

DP World Pvt. Ltd, the world’s fourth biggest container port operator majority owned by the Dubai government, has plans to invest over $1 billion in India for augmenting its port-related operations.

Middle East

OSV Delivered to MC2 in Dubai

Marine Core & Charter LLC (MC2) headquartered in Dubai has taken delivery of the new build PETRA-1, the first of two, 45-meter Fast Offshore Support Vessels in

Canada Says Lifting Some Sanctions Against Iran

The Canadian government said on Friday it was lifting some sanctions against Iran, including the broad ban on financial services, imports and exports, making Canadian

Cepsa Resumes Iranian Oil Supplies to Spain

Spanish refiner Cepsa will ship a 1-million barrel cargo of Iranian oil to its refineries, according to vessel agents' data and market players' information on Wednesday.

 
 
Maritime Contracts Maritime Security Maritime Standards Navigation Pod Propulsion Salvage Ship Repair Ship Simulators Sonar 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: 0.1175 sec (9 req/sec)