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Energy Insights: Energy News: Restart of Libya's oil output hard to predict -oil minister

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Restart of Libya's oil output hard to predict -oil minister


By Julia Payne and Lin Noueihed

(Reuters) - Libya's oil minister said on Wednesday there was no clear timetable for the resumption of steady oil output as an end to the stand-off with rebels could still falter and the 9-month port shutdown may have damaged some facilities.

A tanker started loading crude at Libya's eastern port of Hariga for the first time since July on Wednesday - the first positive signal of an end to the four-port blockade by an eastern federalist group led by Ibrahim al-Jathran.

But Tripoli still faces many hurdles to get the bulk of its oil back online. Negotiations to free the country's largest oil terminals are still on-going and a second port that was due to re-open after the agreement last week is still under Jathran's control.

"Zueitina (port) is not ready yet ... because we have still not received a release notice from the Petroleum Facilities Guard. We're expecting this soon ... it has already been almost two weeks since the agreement," Oil Minister Omar Shakmak told Reuters in an interview.

"We will work after we receive a declaration and start with an assessment and then we can remove the force majeure as we did with Hariga."

Oil output was currently around 200,000 barrels per day, with exports accounting for about 70 percent of the volume, Shakmak said, while the western oilfields, El Sharara and El Feel, were still closed by other protesters.

"During at least say the next 4-5 weeks, you can't consider the new volume as the average of exports. The quantities will be part of the crude in storage tanks," he said.

As for output, Shakmak said it was difficult to predict how quickly the fields would return to normal as there could easily be more disruption as well as damage due to the long shutdown.

"From a technical point of view, there could be some damage. It's not clear yet. A technical team will have to do an assessment," he said.

Prior to the port blockade, the government had already conceded to demands from other eastern activists such as to move the NOC headquarters to Benghazi.

The plan is still in place, said Shakmak, but only in its initial stages and a building still needed to be constructed.


The tanker Aegean Dignity arrived at Hariga on Tuesday and more tankers were on the way, according to National Oil Corp. and shipping sources.

"The ship is loading at Hariga. It will load about 900,000 to 1 million barrels," a senior NOC official said.

NOC lifted force majeure on Hariga at the end of last week after a federalist group led by Ibrahim al-Jathran agreed to re-open two eastern ports.

The Petroleum Facilities Guard have not been able to take control of Zueitina yet, the head of the PFG said, as the government's negotiating committee had not given them an official go-ahead. The reason for the delay was not clear.

Jathran's forces are still blocking Libya's largest terminals, Es Sider and Ras Lanuf, pending a negotiation over the division of the country's oil revenues.

Various federalist groups and local tribal leaders would like a portion allocated specifically for the eastern region, historically called Cyrenaica.

From 1 January 2013 to 30 November 2013, NOC exported 248.6 million barrels of crude oil, or 71 percent of its total oil production, it said in a statement on its website.

About 59.7 million barrels, or about 17 percent of its output, were exported while 43.5 million barrels, or 12 percent of total output, went to the country's refineries.

On average, Libya produced 1.05 million barrels of crude oil a day during the 11-month period.

(Additional reporting by Feras Bosalum in Tripoli, Editing by Anthony Barker, Jason Neely and David Evans)

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