Wednesday, June 4, 2014

Prolonged Libyan Oil Closures Delay Return to Normal Output

LONDON—Prolonged closures in Libya's oil fields are set to delay a return to normal output, a senior official said Friday—even after production at the country's largest oil field is restarted.
Speaking at the third New Libya Oil and Gas Forum in London, Anwar Agil, head of production
management at Libya's National Oil Corporation, said a return to normal production at the country's largest oil field could be delayed by four months because more than 20 underground pumps needed to be replaced.
The Sharara field, in western Libya, which is operated by Spain's Repsol SA, REP.MC -3.69% Repsol S.A. Spain: Madrid 20.09 -0.77 -3.69% June 4, 2014 4:32 pm Volume : 27.19M P/E Ratio 74.43 Market
The field has the capacity to produce 340,000 barrels a day—more than a fifth of Libya's normal output of about 1.5 million barrels a day. But even when it restarts, returning to such output levels will still be delayed because of the need to replace the pumps.
Libya has also refrained from restarting Eni ENI.MI -1.06% ENI S.p.A. Italy: Milan 18.66 -0.20 -1.06% June 4, 2014 4:32 pm Volume : 18.69M P/E Ratio 13.72 Market Cap€68.54 Billion Dividend Yield 5.89% Rev. per Employee €1,408,370 05/30/14 Prolonged Libyan Oil Closures ... 05/28/14 Eni Approves New Organizationa... 05/23/14 Gazprom, Eni Agree to Revise T... More quote details and news » SpA's Abu Attifel field, in eastern Libya, because it doesn't want to risk blocking pipelines with the waxy oil it produces if flows are interrupted again, Mr. Agil said.
"There are security issues," he added.
Violence has escalated in Libya as conflict between government forces and rebels has increased. Militants loyal to the renegade general Khalifa Haftar are disputing the legitimacy of a government and parliament where Islamists are the dominant force.
A delay in approving the national budget has led to problems paying oil guards at the Eastern oil port of al-Hariga, NOC spokesman Mohamed al-Harari said on the sidelines of the forum, which is organized by the business research companies IRN and Oliver Kinross.
That has led the guards to interrupt exports at the terminal, though payments for their wages are now on their way, he said.
The country's oil production stands at 150,000 barrels a day, or about 10% its normal level, Mr. al-Harari said.
Nevertheless, NOC expects its oil production to jump by one million barrels a day by 2019, compared with 2013. That is according to data presented by Mr. Agil, the NOC production manager, which shows it expects production to stand at about 1.9 million barrels a day in 2019.

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