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INTERVIEW-Libya oil exports sink as protests, refinery demand bite

Source: Reuters - Mon, 2 Dec 2013 04:09 PM
Author: Reuters
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By Ulf Laessing and Patrick Markey

TRIPOLI, Dec 2 (Reuters) - Libya is exporting 130,000 barrels per day (bpd) of oil as strikes at its main ports and fields coupled with domestic refinery demand keep shipments at a fraction of July's levels, the country's deputy oil minister said on Monday.

A mix of militias, tribesmen and political minorities demanding a greater share of Libya's oil wealth and more political power have shut most oilfields and ports, cutting oil output from 1.4 million bpd five months ago.

Libya is in turmoil, with the government of Prime Minister Ali Zeidan struggling to control dozens of former militias that helped oust Muammar Gaddafi two years ago but have refused to give up their arms.

Production has risen to 224,000 bpd, from 172,000 bpd two weeks ago when protesters from the Amazigh minority ended a strike at the western Mellitah port, Deputy Oil Minister Omar Shakmak told Reuters.

Mellitah, located west of the capital Tripoli, is co-owned by Italy's Eni and state National Oil Corp (NOC).

But protesters demanding more autonomy for their eastern region are still blocking four key ports, keeping exports well below the OPEC producer's usual level.

Exports remain at around 130,000 bpd as NOC is diverting almost half of the remaining oil output from Brega port in the east to feed the 120,000-bpd Zawiya refinery, which supplies Tripoli with gasoline, he said.

"There is no export ... operation from Brega," he said, showing the latest production figure sheets prepared for Zeidan.

Zawiya, the country's second-largest refinery, used to be fed by the southern El Sharara field, which another set of protesters closed in October.

LOSSES

Shakmak said the OPEC producer had lost more than 8 billion Libyan dinars ($6.5 billion) in oil revenues since strikes at oilfields and ports escalated in summer.

"We have a shortfall in the supply of fuel for electric generators for local demand," he said. "Then you have to increase the bill for imports."

He gave no figure, but officials have said Libya plans to import gas from Algeria to meet local demand rising in winter when households turn on heaters.

The lack of security in part of the North African country was also denting investment sentiment. "If there is no production, no plan to have a safe environment, it will affect future investments," he said.

Car bombs and assassinations have become part of normal life in the eastern city of Benghazi but the situation has also worsened in Tripoli, where more than 40 people were killed last month in the worst street fighting since the uprising against Gaddafi.

NOC's marketing relations have been hurt by the strikes. "NOC cannot fulfill its obligations ... They (clients) will look for alternative suppliers," he said.

Asked whether the government would be able to end the blockage and reach a settlement with the strikers, he said: "I have a hint that the issue will be resolved soon. Hopefully soon."

($1 = 1.2370 Libyan dinars) (Reporting by Ulf Laessing and Patrick Markey; Editing by Dale Hudson)

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