News / Middle East

Libyan Oil Output Cut in Half by Strikes, Disruption

FILE - Oil and gas installations are found throughout Libya. This one, built by the Italian ENI group, is on the coast near Mellitah, Libya.FILE - Oil and gas installations are found throughout Libya. This one, built by the Italian ENI group, is on the coast near Mellitah, Libya.
x
FILE - Oil and gas installations are found throughout Libya. This one, built by the Italian ENI group, is on the coast near Mellitah, Libya.
FILE - Oil and gas installations are found throughout Libya. This one, built by the Italian ENI group, is on the coast near Mellitah, Libya.
The Libyan oil industry is in the midst of its worst crisis since the 2011 civil war because of lawlessness and strikes at major petroleum facilities.
 
In the latest disruption, security guards re-imposed a strike they called off over the weekend, forcing the closure of Libya’s two main crude oil export terminals. Operations had resumed on Sunday at the ports of Es Sider and Ras Lanuf after a two-week stoppage. The two ports have a combined export capacity of around 600,000 barrels per day.
 
The work stoppage came just hours after gunmen wounded a guard and ransacked an oil service center Sunday evening in the eastern oasis town of Awjila. Libyan officials said they believe the attack was linked to competition between militia groups over oilfield contracts and the placement of their members in the newly created national Petroleum Facilities Guard, a force under the direct authority of the Defense Ministry, but made up largely of former militia members who have often fought among themselves. 
 
Last week, Libyan Prime Minister Ali Zeidan warned of the economic consequences of the off-and-on disruption to oilfield, production and export terminals. He said oil exports had plunged by 70 percent – a devastating financial setback for Libya, which relies on oil exports for nearly all of its foreign revenues.
 
Oil industry officials said the export terminals at the Es Sider, Amna and Sirtica oilfields had already filled up their storage tanks to capacity and had to shut down production.
 
Libya's oil minister said Monday the government was working to end the disruptions by meeting with the protesters and appointing a new head of the Petroleum Facilities Guard -- but that appointment also appears to have enraged some of the strikers.
 
“Groups closed the ports of Ras Lanouf, Zeuitina, Al-Sedra and Al-Hariga, forcing a drop in production to less than 30 percent of normal levels,” Zeidan told reporters.
 
General insecurity adds to the crisis
 
Over the past few months the oilfields and export terminals have been affected by everything from striking security guards to militias fighting over who should get security contracts. There also has been criminal looting at petroleum service centers and production facilities and fears of terrorist activity by al-Qaida or other jihadist groups. 
 
A surge in bombings, assassination and a mass jail breakout in the country’s second-largest city, Behghazi has added to the insecurity.
 
Libyan Oil and Gas minister Abdel Bari Ali al-Arousi is deailing with a lot of problems these days.Libyan Oil and Gas minister Abdel Bari Ali al-Arousi is deailing with a lot of problems these days.
x
Libyan Oil and Gas minister Abdel Bari Ali al-Arousi is deailing with a lot of problems these days.
Libyan Oil and Gas minister Abdel Bari Ali al-Arousi is deailing with a lot of problems these days.
According to the country’s oil minister, Abdelbari al-Aroussi, Libya is now only exporting 330,000 barrels through the port at Zawiya, the one remaining export terminal that so far has been free of disruption or strike activity by guards demanding back pay and better salaries.
 
Oil accounts for more than 80 percent of Libya’s gross national production and more than 95 percent of exports. The country’s oil production stood at 1.6 million barrels a day just before the 2011 uprising that toppled Muammar Gaddafi. During the NATO-backed uprising oil production it shrunk to just 60,000 barrels a day, according to the International Energy Agency.
 
Libya’s transitional authorities were quick to encourage foreign oil companies and the Libyan National Oil Corporation to resume production quickly after fighting stopped. In the autumn of 2011, to the surprise of foreign oil experts, they claimed production almost matched pre-war levels.
 
But oil industry insiders told VOA they thought the numbers were exaggerated and output was at least a quarter of a billion barrels a day short of government claims. Some still remain skeptical about government figures.
 
“It isn’t that hard to play around with the numbers,” said a foreign oil consultant, who declined to be named, fearing to do so could jeopardize his future work for Libya’s National Oil Corporation. “Production did resume quite quickly because everyone took a short cut when it came to repairs and delayed replacing pipelines and equipment that are past their optimum life spans.”
 
Long-term problems
 
Security issues and the resulting supply disruptions plaguing Libya’s oil industry are deterring some major foreign oil companies from competing for contracts to manage the fields, say oil analysts.  Industry experts say some oil majors such as Royal Dutch Shell have been cautious about bidding for contracts or expanding operations in Libya.
 
Although denying it was pulling out of Libya, late last year Shell suspended some exploration projects in the country, arguing the results had been disappointing. Industry insiders say a key reason for that decision revolved around security concerns.
 
“Shell wants a stable security environment – and they aren’t the only ones worried about strikes, opportunistic gun attacks and spotty security. No one wants to see a repeat of the al-Qaida attack earlier this year in Algeria,” said a foreign oil consultant, who has reviewed the workings of the recently created Petroleum Facilities Guard.  
 
“The Libyan government is still a long way from consolidating control of the country’s oilfields, pipelines and ports,” he says.

You May Like

As US Strikes Syria, China Sees Parallels at Home

Beijing is debating how much support to give international coalition against IS militants and trying to figure out how many Chinese nationals may have joined group overseas More

CDC: Ebola Could Infect 1.4 M by 2015

US health officials say if efforts to curb the outbreak are not increased, cases will soar dramatically by early next year More

Video USAID Provides $231 Million for Girls Education in 5 Countries

US Agency for International Development partners with celebrities to call attention to importance of education for girls worldwide More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Washington to Pyongyang: 'Shut This Evil System Down'i
X
Scott Stearns
September 23, 2014 10:52 PM
U.S. Secretary of State John Kerry is calling on North Korea to shut down prison camps and other human rights abuses following a United Nations Commission of Inquiry into "widespread and systematic human rights violations." VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Washington to Pyongyang: 'Shut This Evil System Down'

U.S. Secretary of State John Kerry is calling on North Korea to shut down prison camps and other human rights abuses following a United Nations Commission of Inquiry into "widespread and systematic human rights violations." VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video US, Gulf Allies Strike Islamic State Militants in Syria

United States forces have carried out strikes against Islamic State or ISIL militant positions in Syria - the first time Western forces have taken action on Syrian soil. Five U.S. allies from the Gulf joined the military action. Local reports suggest dozens of militants were killed. The U.S. also carried out unilateral missile strikes against a Syria-based terror group which Washington says poses an imminent threat to the West. Henry Ridgwell reports from London.
Video

Video High Intensity Focused Ultrasound Used to Kill Cancer Tumor

There is a new way of killing certain cancer tumors that allows the patient to go home on the same day. Surgeons at the Keck Medical Center of the University of Southern California became the first doctors to use this procedure on a patient with the help of high intensity focused ultrasound, or HIFU, and new robotic technology. Elizabeth Lee reports from Los Angeles.
Video

Video USAID Provides $231 Million for Girls Education in Five Countries

Hollywood stars Alicia Keys, Jennifer Garner and 30 others have voiced their support for a U.S.-backed initiative called "Let Girls Learn." The $231 million program, funded by the U.S. Agency for International Development, is aimed at ensuring public and quality education for girls worldwide. As VOA's Mariama Diallo reports, this new program will focus on five countries in Africa, South Asia, Latin America and the Middle East.
Video

Video UN: Relocation of Bedouins in Israel Weakens Two-state Solution

Rural Bedouins living in disputed lands east of Jerusalem could soon find themselves forcibly relocated. VOA's Sharon Behn reports from Jerusalem that while Israel defends the move as in the Bedouins’ best interests, the United Nations says the plan threatens the survival of the two-state solution with Palestinians.
Video

Video NASA’s MAVEN Probe Enters Mars Orbit

NASA’s newest Mars probe, called MAVEN, has successfully entered its designated orbit around the Red Planet. Scientists will use its sophisticated instruments to try to learn what happened to the atmosphere Mars had a few billion years ago. VOA’s George Putic has more.
Video

Video Prolonged Drought Plagues SW Oklahoma Farmers

Parts of western Texas and southwestern Oklahoma have been in drought conditions for several years running and the deficit in rainfall has taken a heavy toll on cotton and grain production. Oklahoma Governor Mary Fallin says the state has suffered $2 billion in agricultural losses since 2011. There has been rain in recent weeks, but, as VOA’s Greg Flakus reports from Altus, Oklahoma, for most farmers it has been too late.
Video

Video For West Ukraine City, Conflict Far Away Yet Near

The western Ukrainian city of Lviv prides itself on being both physically and culturally close to Western Europe. The Russian-backed separatists in the eastern part of the country are 1,200 kilometers away, and seemingly even farther away in their world view. Still, as VOA’s Al Pessin reports, the war is having an impact in Lviv.
Video

Video Saving Global Fish Stocks Starts in the Kitchen

With an estimated 90 percent of the world’s larger fish populations having already vanished, a growing number of people in the seafood industry are embracing the concept of sustainable fishing and farming practices. One American marine biologist turned restaurateur in Thailand is spreading the word among fellow chefs and customers. VOA Correspondent Steve Herman reports from Bangkok.
Video

Video Chinese Admiral Key in China’s Promotion of Sea Links

China’s President last week wrapped up landmark visits to India, Sri Lanka and Maldives, part of a broader campaign to promote a new “Maritime Silk Road” in Asia. The Chinese government’s promotion efforts rely heavily on the country’s best-known sailor, a 15th century eunuch named Zheng He. VOA's Bill Ide reports from the sailor’s hometown in Yunnan on the effort to promote China’s future by recalling its past.
Video

Video Experts Fear Ebola Outbreak ‘Beyond Our Capability to Contain’

Each day brings with it new warnings about the deadly Ebola outbreak already blamed for killing more than 2,600 people across West Africa. And while countries and international organizations like the United Nations are starting to come through on promises of help for those most affected, the unprecedented speed with which the virus has spread is raising questions about the international response. VOA's Jeff Seldin has more from Washington.
Video

Video Migrants Caught in No-Man's Land Called Calais

The deaths of hundreds of migrants in the Mediterranean this week has only recast the spotlight on the perils of reaching Europe. And for those forunate enough to reach a place like Calais, France, only find that their problems aren't over. Lisa Bryant has the story.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid