OGJ Oil Diplomacy Editor
LOS ANGELES, Mar. 2 -- Uncertainty continues to prevail over Libya’s oil and gas industry, with each side in the developing civil war claiming to be in control of the country’s oil fields, pipelines, and ports.
“Many of the country’s oil fields and export terminals are in parts of the country now effectively controlled by opponents of the Libyan government, although the state-run National Oil Co. (NOC) claims to retain firm control over all the country’s oil installations,” said the Centre for Global Energy Studies in recent report.
But CGES said control matters little as much of the country’s oil infrastructure lies idle after foreign companies pulled out their expatriate staff and shut in large parts of the country’s oil production.
“Latest estimates suggest that somewhere between 50% and 80% of Libya’s oil production has been lost temporarily, although no physical damage has been reported to oil facilities,” CGES said.
Libya’s leader Moammar Gadhafi confirmed that view. “Oil production is at its lowest,” said Gadhafi, adding that “oil fields are safe and under control, but the foreign firms are afraid.”
Over national television, the Libyan leader blamed armed gangs roaming the country for the reduced output, saying, “These gangs made oil companies afraid, flee, and stop production.”
However, Gadhafi also warned Western nations against intervening in the situation, saying it is “not at all in their interest to shake the Libyan regime.” In reprisal, he said that his country could turn to Chinese, Indian, South Korean, and Brazilian firms as business partners.
Meanwhile, opponents of Gadhafi’s continued rule, who are reported to have taken control of Benghazi in the country’s eastern region, claimed that oil production and exports were continuing as normal.
“There is a long cue of tankers,” said one official of the Benghazi-based Arabian Gulf Oil Co. (AGOC), which has broken ties with its parent company, NOC.
"We don't want to stop the exports, the AGOC official said. “It's not in our interest, or the interest of the global market. We're trying to ease the market.”
He said tankers were at the eastern port in Marsa al-Harigah, near the city of Tobruk, and that the company was producing just under half of its capacity of 375,000 b/d.
Another AGOC executive said normal volumes of 70,000 b/d were arriving through the pipeline to the port near Tobruk, which has a storage capacity of about 4 million bbl.
Despite the claims by AGOC officials, however, analysts remained skeptical about the actual volumes still being produced and exported.
Samuel Ciszuk, Mideast oil analyst with IHS Global Insight, stated, “It's a very chaotic situation, and everything that's said should be taken with a pinch of salt."
Contact Eric Watkins at firstname.lastname@example.org.
Gadhafi threatens revenge as Libya's output plunges