The security situation in
Libya
remains unstable and poses a threat to the country's oil production, which has
nearly reached pre-war levels, Barclays says in a note.
International oil
companies have been reluctant to return to restart drilling at onshore
facilities that produce more than 90% of Libya's oil, and without them oil
production may stagnate or fall again, the bank says. Temporary fixes to the
country's oil installations, around 40% of which were damaged, have allowed
output to resume but current production levels are not sustainable, Barclays
says.
"Add to that the security challenges and budgetary problems, and
even if the repercussions may not be evident immediately, the cracks in
Libya
's
production could appear as early as end-2012," Barclays says.