Middle East

Libya PM warns time running out for oil protests

File - A Libyan oil works at a refinery inside the Brega oil complex, in Brega, eastern Libya, Feb. 26, 2011. (AP Photo/Hussein Malla)

TRIPOLI: Libya's patience with protesters who have halted its onshore oil output is running out and action against them nearer, Prime Minister Ali Zeidan said on Wednesday.

"The government has been patient," Zeidan said. "To preserve national unity we saw fit to use all peaceful means to resolve this issue but at some point we may reach a point in which the state should exercise its role seriously to stop this."

Oil industry executives say Zeidan's shaky central government risked widening violence that could descend into civil war if it uses force to recapture oilfields.

Libya's oil production has fallen further to around 150,000 barrels per day (bpd) - from around 1.4 million bpd in April - confined to offshore rigs protestors cannot reach, a National Oil Corp (NOC) official said.

Armed groups have also threatened to close the Wafa gas field, which if shut would cause severe power shortages in the capital, an oil official told Reuters.

Wafa, in the south west, is the only major gas field left open to supply power stations. Libya is importing much more diesel and fuel oil for electricity plants that previously relied on gas.

Crude oil exports have fallen to around 80,000 bpd, several traders close to the matter said, confined to the offshore Bouri and Al Jurf platforms. Crude exports from the Brega port have been diverted to keep the Zawiya oil refinery in the west running.

"Those Libyans who stopped exports, this is a national crime that is tantamount to treason, because you are cutting the income of Libyans. You are someone who had been entrusted with the task of protecting the country's wealth, yet you are abusing it for your ends," Zeida told a news conference.

In the east, where most oil production is based, many of the workers and armed militias that guard oil installations are pushing federalist demands and calling for a bigger share in the country's oil wealth. Others press for changes in management and higher pay.

Finance Minister Alkilani Abdelkarim Al-Jazi said the stoppages have cost Libya billions of dollars in lost revenue and were already affecting its $52 billion budget, almost entirely dependent on oil and gas revenue.

OPEC-member Libya was forced to suspend contractual obligations with a force majeure on most exports to reduce its losses.

Zeidan said foreign firms that have joint ventures with Libya in the oil industry understood the difficulties it faced.

"I don't think this matter will take a long time. We told them we are going to solve it soon. We are partners and have a long history of dealing," he said.

Only three export terminals remain open: Marsa Brega and the offshore Jurf and Bouri platforms.

There were two vessels waiting to load at the port of Hariqa in far eastern Libya which were having difficulty finding crude from shut oilfields, the NOC official, who requested anonymity, told Reuters.

The energy committee of the General National Assembly, in touch with senior oil officials, said in a statement that the stoppages were "causing huge losses to the Libyan state that would directly impact the livelihoods of ordinary Libyans."

"Production has stopped as a result of the port closures and production has reached almost zero," said Naji Mukhtar, the head of the GNA's energy committee.

Mukhtar said the continued strike was hurting Libya's international credibility and risked losing it long term customers.

 

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