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article imageOil production low due to strikes Libya imports diesel fuel

By Ken Hanly     Sep 3, 2013 in Business
Tripoli - Blockades by striking guards at key Libyan export oil terminals have sent oil production to under 100,000 barrels a day a major blow to the country's economy. Many guards have been on strike since late July.
The guards accuse authorities of corruption by selling more oil than is documented and pocketing the extra funds. The government in turn claims the guards have been trying to sell oil on the black market. A member of the Libyan parliament's energy commission to Libyan TV, "Oil production now stands at less than 100,000 barrels per day."
Before the guards started their strike, Libya was producing from 1.5 million to 1.6 million barrels per day. Oil and gas exports bring in most of Libya's foreign currency with hydrocarbons accounting for more than 80 percent of GNP and almost 97 percent of its exports.
The Libyan National Oil Company (NOC) declared a force majeure at several main terminals on Aug. 21. The measure invokes special circumstances and will allow the company to breach contracts to supply oil. Given the blockades, the company simply cannot supply the oil. The strikes will cause a significant shortfall in the national budget which projected income from daily production of 1.6 million barrels per day at an average price of US $90 per barrel. Many of the guards are ex-rebels who helped topple the Gaddafi regime.
As a result of the vastly reduced production, Libya has begun to import diesel fuel for its power plants. A National Oil Company senior official said that Libya had imported at “least three times the quantities of liquid fuel” than usual to keep power plants operating. Gas that is used for power in the eastern regions has completely stopped flowing, said the official. However, the Wafa gas field was still operational providing about 13 million cubic meters per day providing relief for some plants.
There were queues reported for motor fuel in the capital Tripoli. One shipment of crude for export was diverted to supply a domestic refinery. Nevertheless exports of gas to Italy were still normal as gas exports so far have not been affected.
More about Libya, Libya oil production, Libyan National Oil Company
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