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Libya lost $7B to oil strikes, needs new buyers
Reuters
Vehicles pass through at the main gate of the Zawiya refinery and oil port, as guards stand nearby, after it was reopened following a protest, November 13, 2013. (REUTERS/Ismail Zitouny)
Vehicles pass through at the main gate of the Zawiya refinery and oil port, as guards stand nearby, after it was reopened following a protest, November 13, 2013. (REUTERS/Ismail Zitouny)
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TRIPOLI: Libya has lost more than $7 billion and faces new competition from Algeria and Nigeria in oil markets due to strikes at oil fields and ports drying up exports, Oil Minister Abdel-Bari al-Arusi said Saturday.

A mix of militias, tribesmen and civil servants have seized most oil ports and fields to demand more political power or higher pay, throttling Libya’s oil export lifeline.

The OPEC producer is facing turmoil as Prime Minister Ali Zeidan’s government struggles to control dozens of former militias that helped oust Moammar Gadhafi two years ago but have refused to give up their arms.

Arusi said Libya had lost 9 billion Libyan dinars ($7.29 billion) in oil revenues after output had fallen to 250,000 barrels per day from 1.4 million bpd in July.

He did not say how much Libya is exporting, but his deputy told Reuters last week that up to 50 percent of output was being used to keep the 120,000 bpd Zawiya refinery running.

“We are facing a big problem because oil from Algeria and oil from Nigeria has entered the Mediterranean [market],” Arusi told Al-Naba television station. “We have started looking for new markets in East Asia to offset the loss.”

He said he hoped export ports would start to work soon but did not repeat comments from Wednesday that terminals might reopen Tuesday.

Arusi said the government was having trouble drafting a 2014 budget due to the drop in production from 1.4 million bpd in July to 250,000 bpd now.

“We have a problem now. How are we supposed to prepare the budget?” he asked, adding that initial planning had assumed output of around 1.3 million bpd.

He said only the Al-Fil field, offshore operations and fields belonging to state-owned Sirte Oil Co. in central Libya were still producing oil.

Arusi said the abrupt halt in production had also damaged pipelines and other oil facilities, while some oil staff were in bad shape psychologically due to the strikes. “We are talking here about many cases, not just one” he said.

He said the electricity supply would improve within hours after members of the Amazigh, or Berber, minority had ended a blockade of a gas pipeline feeding a power plant in western Libya that they had staged to demand more political rights.

However, outages again hit central parts of the capital Tripoli Saturday.

Zeidan has failed to end strikes disrupting oil and gas supplies that started in earnest in the summer.

One difficulty is that protesters are not unified, but range from a regional autonomy movement in the east to civil servants seeking pay and minorities such as the Berbers, who want their language recognized. Those demands are hard to meet for a prime minister weakened by political infighting.

Western powers worry the North African country will slide into instability with militias calling the shots in the streets while the government struggles to keep the budget running to pay civil servants and ease social tensions.

 
A version of this article appeared in the print edition of The Daily Star on December 09, 2013, on page 5.
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