Libya's leader blamed rebel "gangs" Wednesday for scaring off international oil firms and triggering a steep drop in crude output, but asserted all oil facilities were firmly under government control.
Oil officials in the rebel-held east, meanwhile, in an apparent attempt to reassure oil companies, said there was no dip in exports from the region and that funds from oil sales would continue to be deposited in Libya's accounts, even if the OPEC member state comes under international sanction.
The dueling statements did little to clarify the murky picture of how the OPEC member country's vital oil sector was operating after two weeks of fighting. In a sign that neither side was giving a full picture, government and rebel forces fought Wednesday for control of an eastern oil installation at the Brega port in a battle that included a government airstrike.
"It's a very chaotic situation, and everything that's said should be taken with a pinch of salt," said Samuel Ciszuk, Mideast oil analyst with IHS Global Insight in London. "You have a lot of new stakeholders controlling different parts of the oil industry in Libya." The list of unknowns in Libya far eclipses the list of certainties.
There is some production, but nowhere near the 1.6 million barrels per day the country normally produces. The country's de facto oil minister, Shukri Ghanem, said several days ago that production nationwide has declined by half.
Exports are continuing from at least some eastern ports.
But it was unclear if that oil was being siphoned from existing stocks and how quickly workers would be able to top-up the storage tanks if production from some fields has been halted. Other ports, including the one at Brega, have seen pipeline output fall by as much as 80 percent.
Another question is who gets paid.
Officials from the Arabian Gulf Oil Co. -- which is based in the rebel headquarters of Benghazi and has broken ties with its parent company, the state-run National Oil Co. -- said the money is still being funneled into the old Libyan accounts. Experts, however, questioned whether oil companies would be comfortable with that arrangement and what they may do if, for example, the firm, decides to set up its own marketing arm.
"At least for now, those who are intent on lifting (oil) will pay the NOC," said Ciszuk. But the "legality of their claim to be able to set up a marketing arm would be in question." Another option would be the establishment of an escrow account that would be released once either Gadhafi's regime collapses or some other political settlement is reached.
"From a legal perspective, (an escrow account) makes a lot of sense," said Mohammed El-Katiri, a Mideast expert with the Eurasia Group in London. "It gives security to the buyers and credibility for the national oil company." But, added El-Katiri: "I don't think that any company would want to deal with Libya at this stage, given the confusion on the ground." Most of the oil being loaded or waiting to be loaded is likely February-lifting cargoes that were under term contracts already paid for. The real test will likely emerge for March-loading contracts that had yet to be priced or paid for.
Ciszuk said it is unlikely that "payment for any of the oil shipped from Agoco's Marsa al-Harigah terminal will have benefited the interim government being set up in Benghazi, as it reportedly was shipped under pre-existing term contracts signed with the NOC's marketing arm." Agoco "currently lacks its own marketing establishment," he said.
Equally unclear is who controls what.
Libyan leader Moammar Gaddafi, in a speech in Tripoli on Wednesday, said the country's oil fields and ports are "safe" and "under control," echoing earlier assurances by the country's oil minister. He also blamed the rebels in the east for the country's woes, saying: "These gangs made oil companies scared, run away and stop production." "Oil production is at its lowest," Gadhafi said, without providing any reference point.
Oil executives with the Arabian Gulf Oil Co. said the east was firmly in their control.
"There is a long cue of tankers," said the Agoco official. "We don't want to stop the exports. It's not in our interest, or the interest of the global market. We're trying to ease the market." Tankers were at the eastern port in Marsa al-Harigah, near the city of Tobruk, the official said, speaking on condition of anonymity because of security concerns. He said that the company was producing slightly under 50 per cent of its roughly 375,000 barrel-per-day capacity.
Rajab Sahnoun, another Agoco executive, said they were receiving their normal volumes through the pipeline to the port near Tobruk -- roughly 70,000 barrels per day. The terminal has a storage capacity of about four million barrels.
Experts, however, were skeptical about the actual volumes still flowing out of Libya.
Daniel Johnston, an oil consultant and engineer who has advised international oil companies as well as the Egyptian and Moroccan governments on production contracts, said he would be very surprised if more than "a trickle" of oil was still coming out of Libya.
"More than 50 per cent of the country's oil production comes from international companies and they just hate that kind of unrest," said Johnston, who has worked in the oil industry for more than 35 years and runs a consultancy out of Hancock, New Hampshire.
A case in point was Austria's OMV. The company said the Shatira field it operates in Libya was closed down for security reasons. Company spokesman Sven Pusswald said the fields in which it has partnered with other companies are producing some oil, but "in any case, not the usual amounts." If Gadhafi and his regime has a vested interest, albeit for domestic consumption, of painting a poor picture of the oil production situation, then the rebels in the east have as much of a reason to play it up.
With few hard facts and figures, analysts are assuming the worst, as are global oil markets.
"It's questionable what's coming through the pipelines," said Ciszuk, adding that given the exodus of foreign oil workers, it's doubtful that the Libyans would be able to offset the loss in experience very easily.
People have "to have in the back of their minds, that it's in the interest of the opposition movement to show that they're in control and are responsible," he said.