WSJ 02/01/14 Libya Hopes to Restart Oil Production
WSJ 02/01/14 Libya Hopes to Restart Oil Production
04-01-2014
Denis Florin, head of oil consultancy Lavoisier Conseil, said the political crisis could be resolved by the ascent of a "strong leader" backed by a revived security apparatus or by agreement to create a federalist Libya as sought by protesters in eastern Libya.
By SUMMER SAID CONNECT Jan. 2, 2014 12:59 p.m. ET Libya hopes it can restart production at one of its largest oil fields, El Sharara, operated byRepsol SA, REP.MC -1.42% in two to three days after protesters agreed to end their two-month stoppage of the facility, the spokesman of the state-owned National Oil Corp. said Thursday. "The protesters agreed to end their blockage of the field...so if they fulfill their promise and leave the field completely, we can restart operations again within two to three days," Mohamed al-Harari told The Wall Street Journal. "We are ready to reopen the field once they are all gone." Tribesmen calling for greater political recognition in late October shut the 350,000 barrel-a-day facility, which normally accounts for about 20% of production in Organization of the Petroleum Exporting Countries member Libya. The stoppage of the field, located about 700 kilometers south of Tripoli, is one of several disruptions of Libya's oil supply caused by protesters, including workers and armed militia. As a result, the country's output fell to below 250,000 barrels a day, compared with 1.6 million barrels a day in 2011 before the conflict that led to the ouster of Moammar Gadhafi. Mr. al-Harari said that, while he was hopeful that Sharara will resume operations soon, there was no indication as to when tribal leaders in eastern Libya would end their blockage of the three oil ports in the region. Ibrahim al-Jathran, the leader of a large militia that has been blocking several ports since July, said in December his group wouldn't reopen them because the demands for greater regional autonomy hadn't been met. Mr. Jathran, who said his group wants control over the oil revenue in the eastern province of Cyrenaica, has reduced the country's oil exports to a trickle by keeping oil terminals in the center and east of the country closed. The closures have cost the country $7 billion, the government said. Libya, holder of Africa's largest oil reserves, had been exporting more than a million barrels a day of oil before July. Following Mr. Jathran's comments, Libya's Oil Minister Abdelbari al-Arusi told The Wall Street Journal that Libya should use force to open the closed ports. Oil experts, however, are skeptical Libya's oil production could sustainably recover without the resolution of a political standoff that has led to the blockade of oil ports in eastern Libya. Denis Florin, head of oil consultancy Lavoisier Conseil, said the political crisis could be resolved by the ascent of a "strong leader" backed by a revived security apparatus or by agreement to create a federalist Libya as sought by protesters in eastern Libya. —Benoit Faucon in London contributed to this article.