Libyan Unrest Drives Oil Output Down

By MarEx 2013-06-11 09:11:00

Libya's oil output has sunk back to a current 1.16 million barrels per day of oil due to disruption at fields and terminals, a senior industry source told Reuters on Tuesday.

It pumped 1.6 million bpd before the revolution of 2011.

Despite oil flows returning more rapidly than expected immediately after that, Libya has struggled to maintain steady output levels as protests and technical problems have cut deeply into production rates over the past year.

In April, flows topped out at 1.55 million bpd, according to the deputy oil minister, who said Libya hoped to raise output even further by June or July, to 1.7 million bpd.

This target now appears elusive as Libya struggles to deal with protests that have shut down two major oil export terminals and curbed flows from at least one major field, El Feel, a joint venture with Italy's Eni.

The solution at El Feel, which can pump up to 130,000 bpd and is in Libya's southwest, has been to promise new operations including a refinery and an exploration firm in the region to create jobs.

It is not yet clear whether this will be enough to dislodge protesters, who halted operations at the field at the end of May.

At the oil exporting terminal of Zueitina, the situation may be more complicated as the port has been hit by protests several times since the revolution ended, and did not operate at all for about six weeks at the start of the year.

Protesters there have also demanded jobs, but also want the firm to move its headquarters east from the capital Tripoli.

The Marsa El Hariga terminal has operated more smoothly since the uprising ended, but protests over jobs there have kept it closed for more than 20 days, according to the operator.

"Sarir crude has not loaded for at least 20 days. Zuetina is on strike and Zawiya terminal is supposed to (strike) as well. Libya is seriously falling apart," said one oil trader familiar with Libyan market.

Reporting by Marie-Louise Gumuchian; additional reporting by Emma Farge in Geneva; Writing by Jessica Donati, editing by William Hardy

Copyright Reuters 2013.