DTN News - POST-GADDAFI ERA IN LIBYA: As Oil Production Rises, Libya Expects To Hit Prewar Levels By June

DTN News - POST-GADDAFI ERA IN LIBYA: As Oil Production Rises, Libya Expects To Hit Prewar Levels By June

Source: DTN News - - This article compiled by Roger Smith from reliable sources By Clifford Krauss - The New Yorks Times

(NSI News Source Info) TORONTO, Canada / TRIPOLI, Libya - November 10, 2011: The acting Libyan oil minister, Ali Tarhouni, said on Thursday that so much progress was being made in resuscitating the country’s oil fields that production would return to more than 40 percent of its prewar level by the end of the year and completely recuperate by June.

“Things are going very well,” he told reporters at a news conference. “The oil sector is ahead of our expectations and everyone’s expectations. We will surpass 700,000 barrels a day by the end of this year.”

Officials say Libya’s production is 500,000 barrels a day.

Before fighting erupted last winter, Libya produced 1.6 million barrels a day and exported 1.3 million barrels, mostly to Europe. But during the war, the rebels were able to export only a trickle with the help of the gulf nation of Qatar as they tried to gain badly needed cash.

Libyan oil is particularly important for world markets because of its high quality. It needs relatively little refining and is preferred in many European and Asian markets. Since Libyan oil came off line, world benchmark oil prices have been highly volatile despite slumping demand in the United States and Europe.

The return of Libyan oil has allowed other members of the Organization of the Petroleum Exporting Countries to curtail production and strengthen prices in recent weeks.

Fighting caused damage to some of the country’s refineries, and several vital pipelines were cut by the rebels. Several major fields were shut down abruptly, potentially causing damage. International oil and oil service companies removed skilled personnel from the country and hundreds of blue-collar foreign workers from Turkey and Egypt fled as well. But Libyan workers are returning to the fields and restarting operations. Many foreign oil experts have expressed surprise at how well the Libyans have done by themselves, but they say that Libyan officials may be overly optimistic that the country can recover all its production next year.

Some say it could take two years or more, and that will depend on a peaceful transition.

“The oil is coming on a lot faster than expected,” said Francis Osborne, head of energy economics for the consulting firm KBC. But he added, “There is a labor problem. Libyan oil workers are cautious about going back to certain fields, and foreign workers are cautious or requesting increased salaries. There is also the question of security and protection.”

Jon Pepper, a Hess vice president, said, “We’re not sending anyone back yet. We want to see how things settle out. We’re not up and running and it will take time before we are.”

Since the death of Col. Muammar el-Qaddafi last month, violence in the country has been reduced greatly, especially in the cities and most of the countryside. But deep in the desert, where many of Libya’s largest oil fields are, there are reports of roaming bands of armed people.

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*Link for This article compiled by Roger Smith from reliable sources By Clifford Krauss - The New Yorks Times

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