Libya oil crisis deepens as protesters shun talks

TRIPOLI Tue Oct 29, 2013 2:55pm EDT

Related Topics

TRIPOLI (Reuters) - Libya's oil crisis deepened on Tuesday after protesters blocking western fields shunned talks and locals denied that an eastern terminal would reopen, frustrating government efforts to end three months of disruptions.

Libya's oil exports have dropped to less than 10 percent of capacity or 90,000 barrels per day, Reuters calculations show, as renewed protests this week halted operations at western ports and fields, supporting global oil prices.

The head of Italy's Eni, the biggest foreign oil company in Libya and part owner of the Mellitah joint venture, said exports from Mellitah terminal had not been stopped though there was social unrest.

Traders, however, said crude oil loading remained suspended from both Zawiya and Mellitah ports in the west.

Natural gas exports are carried to Italy via pipeline and sources have said those supplies come mainly from an offshore field and have been steady for the last few weeks.

Libyan oil officials were not immediately available to comment on Libyan exports, but Oil Minister Abdelbari Arusi said on Monday overall production had sunk below 300,000 bpd.

Any imminent agreement to even partially resume exports appeared elusive.

Arusi paid an emergency visit to the western Sharara field on Monday and discussed pay increases with oil workers there. He was forced to leave without a deal, however, after local protesters refused to meet him.

"It is regrettable that we return to Tripoli without reaching an agreement with local protesters," the National Oil Corporation (NOC) website quoted Arusi as saying before he left.

"We came to clarify the future plans that the ministry has put in place to develop the area but they refused to meet us for reasons that are unrelated to the sector."


The government has relied on relatively stable revenue from its western ports in recent weeks while struggling to end protests blocking big facilities in the east, where some factions are demanding federal powers and a greater share of the country's oil wealth.

Libya had brought exports back to around 450,000 bpd over the last month, although that level was still far short of its pre-war export capacity of around 1.25 million bpd.

But the latest shutdowns, which began over the weekend, have extended the worst disruption in Libya's oil industry since the 2011 civil war. Only the offshore platforms, Bouri and Al Jurf, remain operational.

Reflecting how elusive a deal in the east is proving, a tribe controlling the 110,000 barrels per day Hariga terminal in Tobruk issued a statement denying that the port was about to be reopened.

The denial marked a further blow to the government's flagging credibility as Prime Minister Ali Zeidan had suggested on Monday that a deal to reopen Hariga could come within a week.

Oil is the main source of revenue for the North African country and the disruptions have cost the government billions of dollars.

The longer the disruptions last the harder it may become for the government to meet the demands of local interest groups who are blocking oil exports as a means of pressuring a government that has struggled to assert its authority in a country awash with guns and powerful militia.

The government in Tripoli has become increasingly isolated since early summer and has only limited resources to control disruptions outside the capital, as indicated by the fact that Zeidan was briefly kidnapped last month.

Gunmen stole $55 million in a heist on a van carrying local and foreign currency for the Libyan central bank in the coastal city of Sirte on Monday, state news agency Lana said.

(Reporting by Lin Noueihed and Julia Payne in London and Ulf Laessing in Tripoli; editing by Jason Neely)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see
Comments (1)
MikeBarnett wrote:
When Obama killed Osama, he gave al Qaeda a great victory. Osama kept trying for a mini 9-11 when he sent men to blow up shoes and underwear on airliners, and his attacks failed. AQ’s new leader, Ayman al Zawahiri, has been moving AQ into striking range of the oil and gas infrastructure of north Africa, the Arabian Peninsula, and the Middle East. Western economies and militaries depend on oil, and raising the terror premium raises the prices and the donations that AQ receives from Sunni Arab countries. The overthrow of Kaddafi allowed AQ to roam Libya, but attacks have not been as necessary as expected because strikes have reduced Libya’s oil to less than 10% of normal production. This keeps oil prices higher that raises incomes for Sunni Arabs who give bigger donations to insurgents for the charity work of insurgents. (They build schools and clinics in addition to fighting.) The West suffers higher prices and lower economies that must then pay for more expensive mechanized militaries, AND the West pays for AQ’s operations with higher oil from Sunni Arab countries that support AQ. In the current situation, AQ doesn’t need to use explosives to attack the oil and gas infrastructure because strikes are accomplishing the military/financial/political objectives for AQ.

Oct 29, 2013 7:55pm EDT  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

Full focus