Libya Contracts U.S. Firm to Extinguish Fire

Fire at Es Sider

By MarEx 2014-12-29 19:00:57

Libya's recognized government has contracted a U.S. firefighter firm to help extinguish fires at storage tanks at the Es Sider oil port, a spokesman said on Monday. Th unnamed U.S. firefighting firm will help extinguish the fires for $6 million with work due to start within five days.

Libya's oil output has shrunk further after the blazing oil tanks helped push world oil prices higher and put a strain on the country's dollar currency reserves.

Libya is surviving on a mere 128,000 barrels per day from fields connected to the eastern port of Hariga, an oil official said on Monday, while fighting halted the major ports Es Sider and Ras Lanuf.

Total oil output, adding offshore fields and Brega output, is about 350,000 bpd - a fraction of the 1.6 million bpd it produced before the 2011 civil war. Some oil is keeping two refineries going, and the official was unable to say how much, if any, was available for export.

Oil tanks at Es Sider have been on fire for days after a rocket hit one of them, destroying more than two days of Libyan production, officials said on Sunday. Libya has appealed to Italy, Germany and the United States to send firefighters.

A spokesperson for ConocoPhillips, which along with Marathon Oil and Hess Corp owns the Waha Oil Co that operates the Es Sider tanks, said they had yet to determine the extent of the damage to the oil storage facilities.

'GROWING FINANCIAL CRISIS'

The central bank warned that Libya faced a "growing financial crisis...due to the sharp fall in oil production and prices, the widening fiscal deficit, the continued depletion of the country's foreign reserves," according to a statement.

Libya's two largest ports, Es Sider and Ras Lanuf, have stopped operating since a force loyal to a rival government in Tripoli tried seizing them from forces allied to the recognized Prime Minister Abdullah al-Thinni.

Thinni has been forced to work out of the eastern end of the country since a rival group called Libya Dawn seized Tripoli in August, setting up its own government and parliament unrecognized by world powers.

A spokesman of an oil guard force allied to Thinni said there would be more air strikes on the city of Misrata unless the rival force pulled out of the vicinity of Es Sider. War planes had struck the western city linked to the rival government on Sunday.

"We have given them a 72-hour deadline to withdraw which started yesterday," the spokesman said.

The western ports of Zawiya and Mellitah have also halted oil exports as the conflict has shut down the connecting fields of El Sharara and El Feel.

Copyright Reuters 2014.