A Review of the Nigerian Energy Industry

Libya output ‘recovers’ amid protests

Oil production platform and supoort ships Alaska05 August 2013, News Wires – Libya’s oil production has recovered to nearly half its normal level as the government seeks to end worker protests that have cut crude exports, according to a report.

Oil Minister Abdelbari al-Arusi said output had ”improved greatly” to reach around 700,000 barrels per day, after earlier being cut to 330,000 bpd due to ongoing strike action, and is likely to rise to 800,000 bpd after the Muslim Eid holiday that starts later this week, Reuters reported.

However, the figure still remains far short of the 1.4 million-bpd rate achieved before the unrest that has resulted in the shutdown of the Zueitina, Es Sider and Ras Lanuf export terminals, leaving shipments being cut to about 425,000 bpd – less than half normal levels.

Security guards seeking more pay shut down Es Sider and Ras Lanuf after protests by locals demanding more oil jobs closed Zueitina.

London-based research firm Energy Aspects is now predicting Libya’s average production for the year to be at 1.2 million bpd, down around 200,000 bpd on 2012, as it sees a “significant impact” on output figures in the second half.

This figure would fall far short of expectations prior to the protests that output could reach 1.5 million bpd for the year, just shy of the 1.6 million-bpd level achieved before the civil war that ousted dictator Muammar Gaddafi.

The ongoing disruption to oil output is threatening a vital source of revenue for the war-torn economy of the North African Opec producer.

Furthermore, the analytical firm stated in a report it believes “there is no quick fix” for labour issues plaguing the Libyan oil sector that are rooted in security concerns and popular discontent over the ruling National Transitional Council’s failure to generate jobs and economic benefits.

It stated that Gaddafi’s fall left a political vacuum with an absence of clear leadership and a power struggle among diverse militia groups that fought in the war, fuelling conflict among rival tribal clans and causing the proliferation of weapons.

“Ultimately, the problems impacting the oil and gas industry go well beyond the widespread weapons or demands of higher wages and jobs. The issue is one of a political vacuum, in a country riddled with tribal and regional divisions. More importantly, there is little that can be done overnight to fix these problems,” the report stated.

In order to halt the unrest, the Tripoli government must address the security situation, tackle the power of the militias and push through the stalled constitution-drafting process to give it legitimacy in the eyes of Libyans, according to Energy Aspects.

– Upstream

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