Libya’s crude production dropped below 400,000 barrels a day as the conflict in the divided North African country cut electricity supply at oil fields, according to the state-run National Oil Corp.
Output in Libya, holder of Africa’s largest crude reserves, has been hampered by inadequate security and maintenance as well as power outages, said Mohamed Elharari, an NOC spokesman. Crude production was about 411,000 barrels a day in June, according to the most recent OPEC monthly report. BP Plc recorded $598 million in exploration write-offs and other costs in Libya in the second quarter, the company said Tuesday.
“The situation is not very good,” Elharari said Monday by phone from Tripoli. “There is poor maintenance, and there are electricity cuts at the oil fields.”
Libya produced about 1.6 million barrels a day before the 2011 rebellion that ended Muammar Qaddafi’s 42-year rule. The country is today the smallest producer in the Organization of Petroleum Exporting Countries. It has failed to restore output as militias fight for the control of export terminals while tribes and workers block operations at fields and pipelines to seek jobs and better pay.
Two Governments
The country has been split since last year between an internationally recognized government that operates from the east and an administration that rules over the capital Tripoli and most of the western region. Es Sider and Ras Lanuf, the nation’s largest and third-largest oil ports, have been shut down since December following attacks by militias loyal to the Tripoli government.
“There is no change to the situation at the ports,” Elharari said. “We are trying to re-open them, but so far there is no progress.”
BP, which in August declared force majeure in Libya, said “there is significant uncertainty on when drilling operations might be able to proceed,” in its quarterly results. Force majeure, a legal status protecting a party from liability if it can’t fulfill a contract for reasons beyond its control, remains in effect at both locations where BP was exploring, off the coast of Sirte and in the Ghadames North and South areas in the Sahara Desert, David Nicholas, a company spokesman, said Tuesday by phone from London.
Paris-based Total SA became the first major European group to take an impairment in Libya, writing off $755 million from its onshore assets, it said on April 28. Eni SpA, with headquarters in Rome, and Madrid-based Repsol SA haven’t yet marked down the value of their investments in the country.
Libya’s challenges in boosting crude production coincide with a global excess in supply over demand for the past five quarters, the most enduring oil glut since the 1997 Asian economic crisis, according to the International Energy Agency.
Recommended Reading
Exxon Versus Chevron: The Fight for Hess’ 30% Guyana Interest
2024-03-04 - Chevron's plan to buy Hess Corp. and assume a 30% foothold in Guyana has been complicated by Exxon Mobil and CNOOC's claims that they have the right of first refusal for the interest.
Pitts: Heavyweight Battle Brewing Between US Supermajors in South America
2024-04-09 - Exxon Mobil took the first swing in defense of its right of first refusal for Hess' interest in Guyana's Stabroek Block, but Chevron isn't backing down.
Petrobras to Step Up Exploration with $7.5B in Capex, CEO Says
2024-03-26 - Petrobras CEO Jean Paul Prates said the company is considering exploration opportunities from the Equatorial margin of South America to West Africa.
Exxon Ups Mammoth Offshore Guyana Production by Another 100,000 bbl/d
2024-04-15 - Exxon Mobil, which took a final investment decision on its Whiptail development on April 12, now estimates its six offshore Guyana projects will average gross production of 1.3 MMbbl/d by 2027.
Exxon Mobil Green-lights $12.7B Whiptail Project Offshore Guyana
2024-04-12 - Exxon Mobil’s sixth development in the Stabroek Block will add 250,000 bbl/d capacity when it starts production in 2027.