Half of Libya's oil exports hit by protests

Reuters News
|
Posted: Jul 06, 2012 5:39 AM
Half of Libya's oil exports hit by protests

By Marie-Louise Gumuchian and Ali Shuaib

LONDON/TRIPOLI (Reuters) - Around half of Libya's oil exporting capacity has been shut down and production reduced by about 300,000 barrels per day (bpd) because of protests by groups demanding greater autonomy for eastern Libya, shippers and officials said on Friday.

At least three major oil exporting terminals were closed the previous evening and by Friday the first delays to oil shipments were reported by oil traders waiting for cargoes to load.

"The vessel has been waiting for documents (to be provided by the port) since this morning," said an oil trader.

Oil companies hoping to lift shipments of crude from the ports affected by the shutdown received a note from agents warning vessels would not be able to berth or load while the strike continued.

"The strikes will continue for 48 hours if the government does not respond positively to their requests," the communique said.

The three ports that have closed, Es-Sider, Ras Lanuf and Brega have a combined export capacity of around 690,000 bpd.

At least two other vessels due at eastern ports over the weekend could be forced to drop anchor until the oil terminals are reopened.

The combined volume the two vessels would be able to load is 1.6 million barrels, over a day's worth of exports from Libya based on pre-war rates.

The Aldan, the first vessel due to reach Libya was just off the coast of Tunisia on Friday afternoon, on its way to Brega.

"If the strike is not stopped during their arrival, the vessels will not be able to berth and load," a local agent wrote in a note to oil traders waiting for their vessels to reach Libya.

OUTPUT FALLS

The protests, combined with other storage and market-related factors, have pushed oil output down by around 300,000 bpd to about 1.3 million bpd, according to National Oil Corporation (NOC) Chairman Nuri Berruien.

"You are talking about a shortage in daily production of about 300,000, plus or minus," NOC Chairman Nuri Berruien told Reuters by telephone.

"Most of the cut is because of the unrest."

Production has recovered swiftly after grinding to a near halt during last year's uprising against ousted Muammar Gaddafi, and exports have even exceeded pre-war rates because Libya's largest refinery is still offline, freeing up oil for export.

Berruien said political protesters had prevented the lifting of crude from terminals in the east, such as Es-Sider and around Ras Lanuf, citing storage capacity and market factors as additional reasons for the cut.

"(The) unrest has nothing to do with the oil sector," he said. "Some people are stopping the lifting of crude... And accordingly the companies have to reduce their production because some of the tanks are full."

Berruien said the disruption by protesters had begun on Thursday evening. He said some of his staff had been told the disruption would last 48 hours.

"For the security of the people working there and the equipment, it was decided to minimize the exportations from the host terminals, Sidra and Ras Lanuf, and in this case you have to reduce the production," Deputy Oil Minister Omar Shakmak told Reuters.

A self-proclaimed autonomous council for the oil-rich province has called on people in the region to boycott the July 7 election for a national assembly, saying it will not give adequate representation to the east.

The anti-election group also now includes some tribes as well as disgruntled former rebel forces gathering at Wadi Ahmar, which lies west of Benghazi, analysts have said.

Libya's east, source of most of the country's oil, was starved of cash during Gaddafi's 42-year rule, and calls for federal rule have been fuelled by long-standing complaints it has been deprived of its fair share of wealth.

Saturday's election for the assembly, which will name a new prime minister, help draft a constitution and enact legislation is a crucial milestone in shaping Libya's institutions.

(Reporting by Jessica Donati, Julia Payne, Marie-Louise Gumuchian and Ali Shuaib; writing by Jessica Donati; editing by Keiron Henderson)