Libya's oil production plunged Tuesday to its lowest level since 2011 after an armed group closed the country's largest western oilfields operated by Eni SpA and Repsol SA, deputy oil minister Omar Shakmak said.
Libya
's oil
production plunged Tuesday to its lowest level since 2011 after an armed group
closed the country's largest western oilfields operated by Eni SpA and Repsol
SA, deputy oil minister Omar Shakmak said.
The member of the Organization of the Petroleum Exporting Countries is
currently producing 320,000 barrels per day, compared with the pre-war levels
of around 1.6 million barrels, Mr. Shakmak told the Wall Street Journal.
"Both El Feel and Sharara fields are closed which is hitting our
production badly. The group behind the shutdown of the fields and the pipeline
linking them to the port, were not oil workers or Petroleum Facilities Guard
members and it is the defence ministry that should protect the fields and fix
this problem," he said.
El Feel oilfield is operated by Mellitah--a joint venture between Libya's state
energy firm, the National Oil Corporation, or NOC and Italy's Eni, while
Sharara is run by Akakus--a joint venture between NOC and Spain's Repsol.
Mr. Shakmak said it is unclear what the armed group, which he described as
"third party", wanted or when the oilfields will resume production.
Striking workers have recently hit eastern and central Libyan ports and
effectively shut down shipments from terminals there, which account for more
than half of
Libya
's $60
billion of oil exports annually. The workers, who had already slashed the
country's output by more than half earlier this month, are demanding the
payment of wages, as well as higher salaries or more jobs. However, officials
said the situation was more precarious, with armed guards trying to sell oil
without government approval.
Last week oil exports from the
port
of
Marsa
al Brega
resumed after a force majeure was lifted as
protesters ended their blockade of the terminal. Es Sider, the largest of
Libya
's oil
terminals with a 350,000 barrel-a-day capacity, as well as Ras Lanuf and
Zueitina in eastern
Libya
remain
closed.
Libya's troubles come at a time when the world's largest oil producers are
facing increasing competition from rising production in places like the U.S.,
where the extraction of oil trapped inside shale rock has seen output soar.
According to the international Energy Agency, demand for oil from OPEC dipped
below 30 million barrels a day in the first quarter of this year and is
expected to fall further next year.
According to the IEA,
Libya
produced just 1 million barrels a day in July.
"In the short term, we are not worried about our market share, but if this
continues for longer than just a few days, we are facing a threat from other
OPEC producers like
Saudi Arabia
upping their production and squeeze us out," Mr. Shakmak said.
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