Libya says oil output drops more
London/Tripoli, August 15, 2013
Libya said on Wednesday its crude oil output, much of which has been paralysed for more than two weeks by labour unrest, had fallen again as new problems appeared at oilfields.
"Production is lower than yesterday. Today it is at 600,000 barrels per day (bpd) and yesterday it was at 680,000 bpd," deputy oil minister Omar Shakmak told Reuters.
Late on Monday he had estimated the output of OPEC's ninth largest producer at 700,000 bpd, less than half its capacity of 1.6 million bpd, although industry sources and analysts gave lower estimates.
Armed security guards on strike at the North African country's two biggest sea terminals and stoppages at other ports have frozen most of its exports and some oilfields have had to rein in production as a result, because they lack storage.
Some other production facilities have also been halted by protests including occupation by jobless people seeking work, part of a wave of disruption across the economy.
Shakmak on Wednesday attributed the third cut this week in his production figure to various problems at fields including Hamada in the east, but did not give details of the reasons.
"Some fields have problems and one of them is Hamada, production was 10,000 bpd and it has stopped," he said.
Chief policy analyst Richard Mallinson at Energy Aspects in London pegged Libyan output at around 520,000 bpd and exports at around 320,000 bpd out of total export capacity of more than 1.2 million.
The loss to global oil demand that totals about 90 million bpd is a major factor supporting benchmark Brent crude oil futures near $110 a barrel and analysts said global energy prices could be pushed yet higher if the stoppages do not end soon.
"Brent could temporarily spike back to this year's highs of $120 a barrel if Libyan output does not promptly bounce back above 1 million bpd," BoA Merrill Lynch said on Wednesday in a report.
PORTS BLOCKED, REFINERY OPEN
The uncertainty over export facilities left Libya on Tuesday admitting it was unable to allocate cargoes for September loading, which it would normally do around now.
Traders, shippers and Libyan industry sources said there had been no change on Wednesday at the major terminals of Es Sider and Ras Lanuf as well as the ports of Zueitina and Marsa Al Hariga, at all of which exports remained halted.
Shakmak had said on Monday he expected Es Sider to load its first cargo on Thursday or Friday as agreement had been reached there with workers, and that Ras Lanuf might follow suit.
Production at the Hamada field, run by state oil company subsidiary Arabian Gulf Oil Company (AGOCO), had already been run down and had been expected to close if the paralysis of the Marsa Al Hariga port was prolonged.
AGOCO's Sarir, Nafoora and two small oilfields have already been shut down.
The country's largest refinery, the 220,000 bpd Ras Lanuf plant, is operating again after strikes, employees said.
The refinery, which exports jet fuel and high-sulphur diesel, was running on crude from storage at rates below its full capacity but could reduce runs even more if AGOCO production keeps falling, a trading source said.
It is operated by Lerco, a joint venture between Libya's state National Oil Corporation and the UAE's Al Ghurair group.
Output from the refinery will go to the domestic market, with none destined for exports, a shipping source said. - Reuters
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