Financial, security woes put Libyan oil recovery on shaky ground
will come out of that repair work are going to be more limited,” he said.
Fabiani predicted production is likely to hover between 700,000 and one million bpd in the short term. Shutdowns have been caused mainly by armed groups making demands for their members, sometimes claiming to act on behalf of local communities seeking jobs and public services, but also by peaceful civic groups protesting economic hardships since the 2011 overthrow of Muammar Gaddafi.
Sharara
Sanalla has said repeatedly he will not negotiate with blockaders and has threatened to prosecute them, although the NOC also tries to support communities near oil facilities and develop relationships with them. Limited resources and persistent lawlessness in a country split between rival political factions mean the NOC struggles to meet expectations, however.
“The National Oil Corporation is keen to preserve production but at the same time it’s a part of the problem,” said Ghaith Salem alRooq, a negotiator from Zintan who took part in talks to reopen blockaded pipelines near the western town. “They have been making promises to those who shut down the fields, but never fulfilled their promises.” Production at the southwestern Sharara field, which can pump up to 280,000 bpd, or more than a quarter of the country’s total output, is a frequent target of blockades.
In the most recent incident, an armed group forced a two-day shutdown at Sharara in early October to demand salary payments, fuel supplies and the release of members that it said had been detained. A new group called “Enough Silence”, made up of young people from six districts in southern Libya, has said it will peacefully blockade supply roads to Sharara to lobby for oil revenues to be spent on the neglected south.
“The problems are endless,” a spokesman for the movement, Mohamed Hamouzi, told Reuters by phone. “We are talking about severe lack of medical, educational, and security services. There’s no liquidity at all,” he said, referring to severe cash shortages in banks across Libya.
“If our demands for solving these problems are not met we are going to shut down Sharara within two weeks.”
Yesterday, a group of Gaddafi loyalists posted a video of four men standing over a pipeline at an unnamed desert location, threatening to cut supplies of oil and gas to terminals in the Zawiya refinery and Mellitah complex on Libya’s northern coast within 72 hours if one of their leaders was not released from jail in Tripoli.
With the largest proven oil reserves in Africa, pumping more than 1.6 million bpd before 2011, Libya’s production is closely watched. Along with Nigeria, it has been exempted from OPECled production cuts. Adding to uncertainty are political divisions that the United Nations is trying to mend.
A current UN-backed government in Tripoli has been eroded by internal splits, lack of technical capacity and rejection by factions that control the eastern part of the country. —Reuters