Libya oil crisis deepens as protesters shun talks

Reuters , Tuesday 29 Oct 2013

Protesters and locals deny that eastern terminals would reopen, extending Libya's oil crisis

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.

Short link: