News / Economy

Chaotic Libya Struggles to Maintain Oil Output

FILE - In this photo from February 2011, an employee works at an oil refinery in eastern Libya. FILE - In this photo from February 2011, an employee works at an oil refinery in eastern Libya.
x
FILE - In this photo from February 2011, an employee works at an oil refinery in eastern Libya.
FILE - In this photo from February 2011, an employee works at an oil refinery in eastern Libya.
Reuters
Libya is struggling to keep its oil output stable, let alone increase it, as protests cut crude exports in the sector that supplies 95 percent of state revenue.
 
In the past year, disgruntled Libyans have protested at oilfields and export ports, clouding initial optimism over a speedy return to output levels of nearly 1.6 million barrels per day (bpd) following the 2011 war that ousted Moammar Gaddafi.
 
The state National Oil Corporation (NOC) said on its website output had slumped to less than one million bpd following “irresponsible acts by some individuals” who shut down two export terminals and a major oilfield.
 
“The industry is suffering and this cannot go on as it is,” a senior Libyan oil industry source said. “These kind of problems keep recurring and this is hurting the whole of Libya.”
 
The new leadership has struggled to impose its authority on a myriad of armed groups who have the real power on the ground in a country awash with weapons left over from the war.
 
Protesters, usually with social demands, have forced Tripoli to comply with their requests before ending sit-ins or turning valves back on.
 
In the latest headache for the industry, the operator of the major El Feel field, a joint venture between the NOC and Italy's Eni, halted output as some 50 protesters staged a demonstration, calling for jobs and salaries. El Feel, which lies in Libya's southwestern desert, can pump up to 130,000 bpd.
 
In the east, protesters forced the shutdown of the Zueitina and Marsa al-Hariga terminals but workers there said on Tuesday operations were resuming after the demonstrators had left the sites. Zueitina has faced numerous disruptions this year.
 
“If the protesters go to local councils, nobody will listen to them. But if they go to the oilfields or terminals, they have everybody's attention,” a Libyan oil worker said. “This problem keeps happening and the government doesn't know how to cope.”
 
Costly Disruptions
 
Without specifying, the NOC said the latest output cuts were costing the country “hundreds of millions of dollars” in lost income.
 
A prolonged drop in output could be disastrous for state finances, already strained by salary spending which now includes tens of thousands of former rebel fighters from the war.
 
Last month, a committee overseeing Libya's energy industry within the national assembly, said those who forcefully closed down installations should be held accountable in court.
 
But with state security forces and courts still weak, enforcing such action remains a mammoth task. A 15,000-strong force guarding oil sites lacks proper training and equipment and its members have at times fought amongst themselves.
 
“We need a government to make strong decisions and guards to protect oilfields,” Yussef al-Ghariani, of an oil workers' union in the eastern city of Benghazi, said. “Every delay is costly.”
 
In April, oil flows hit 1.55 million bpd, according to the oil ministry, which has previously said OPEC-member Libya aimed to increase output to 1.7 million bpd from the third quarter.
 
But with continuous disruptions due to the protests and sometimes technical problems, this target now appears elusive.
 
“The trend is going in the wrong direction. They are struggling to keep production at 1.3-1.4 [million bpd] whereas they were hoping to be raising it and hitting new peaks,” Richard Mallinson, of consultancy Energy Aspects, said. “The likelihood is only that it will get harder and harder to maintain levels we have seen over the last few months as protests continue and the situation does not improve.”
 
Foreign oil companies are increasingly unsettled by sporadic violence and oil services firms are not rushing to send workers back to Libya.
 
“You just don't know where things are going. People who were already worried about coming here will be even more reluctant,” one foreign oil worker said, declining to be named.
 
With the continuing chaos tainting Libya's image abroad, oil market players are factoring in more disruptions.
 
“Every time you get news of one situation being resolved, you just wait and expect to hear what is the next field that is being shut or obstruction to a terminal,” Mallinson said.

You May Like

Turkey's Controversial Reform Bill Giving Investors Jitters

Homeland security reform bill will give police new powers in search, seizure, detention and arrests, while restricting the rights of suspects, their attorneys More

Audio Slideshow In Kenyan Prison, Good Grades Are Path to Freedom

Some inmates who get high marks could see their sentences commuted to non-custodial status More

'Rumble in the Jungle' Turns 40

'The Champ' knocked Foreman out to regain crown he had lost 7 years earlier when US government accused him of draft-dodging and boxing officials revoked his license More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Victorious Secularists Face Challenge to Form Government in Tunisiai
X
Henry Ridgwell
October 30, 2014 11:39 PM
Official results from Tunisia show the Islamist Ennahda party has failed to win the second free election since the so-called "Arab Spring" uprising in 2011. Ennahda, which handed power to a government of technocrats pending the elections, lost out to the secular party Nidaa Tounes. Henry Ridgwell reports from London that the relatively peaceful poll offers some hope in a volatile region.
Video

Video Victorious Secularists Face Challenge to Form Government in Tunisia

Official results from Tunisia show the Islamist Ennahda party has failed to win the second free election since the so-called "Arab Spring" uprising in 2011. Ennahda, which handed power to a government of technocrats pending the elections, lost out to the secular party Nidaa Tounes. Henry Ridgwell reports from London that the relatively peaceful poll offers some hope in a volatile region.
Video

Video Africa Tells its Story Through Fashion

In Africa, Fashion Week is a riot of colors, shapes, patterns and fabrics - against the backdrop of its ongoing struggle between nature and its fast-growing urban edge. How do these ideas translate into needle and thread? VOA’s Anita Powell visited this year’s Mercedes Benz Fashion Week Africa in Johannesburg to find out.
Video

Video Smugglers Offer Cheap Passage From Turkey to Syria

Smugglers in Turkey offer a relatively cheap passage across the border into Syria. Ankara has stepped up efforts to stem the flow of foreign fighters who want to join Islamic State militants fighting for control of the Syrian border city of Kobani. But porous borders and border guards who can be bribed make illegal border crossings quite easy. Zlatica Hoke has more.
Video

Video China Political Meeting Seeks to Improve Rule of Law

China’s communist leaders will host a top level political meeting this week, called the Fourth Plenum, and for the first time in the party’s history, rule of law will be a key item on the agenda. Analysts and Chinese media reports say the meetings could see the approval of long-awaited measures aimed at giving courts more independence and include steps to enhance an already aggressive and high-reaching anti-corruption drive. VOA’s Bill Ide has more from Beijing.
Video

Video After Decades of Pressure, Luxembourg Drops Bank Secrecy Rules

European Union finance ministers have reached a breakthrough agreement that will make it more difficult for tax cheats to hide their money. The new legislation, which had been blocked for years by countries with a reputation as tax havens, was approved last week after Luxembourg and Austria agreed to lift their vetoes. But as Mil Arcega reports, it doesn’t mean tax cheats have run out of places to keep their money hidden.
Video

Video Kobani Refugees Welcome, Turkey Criticizes, US Airdrop

Residents of Kobani in northern Syria have welcomed the airdrop of weapons, ammunition and medicine to Kurdish militia who are resisting the seizure of their city by Islamic State militants. The Turkish government, however, has criticized the operation. VOA’s Scott Bobb reports from southeastern Turkey, across the border from Kobani.

All About America

AppleAndroid

World Currencies

EUR
USD
0.7893
JPY
USD
107.68
GBP
USD
0.6238
CAD
USD
1.1214
INR
USD
61.185

Rates may not be current.