Libya Waha Oil Output May Resume On Dismissal Pledge-Officials

LONDON (Dow Jones Newswires), Oct. 14, 2011

Waha Oil moved closer to resolving a dispute with workers after a company official said the government supports the dismissal of Chairman Bashir Elshahab.

Workers went on strike last month to protest against Elshahab, who allegedly was close to the regime of Col. Moammar Gadhafi.

Ending the strike at Waha Oil, Libya's largest operation with foreign partners, would lift a key hurdle to the resumption of Libyan oil production. Before Libya's civil conflict, Waha Oil produced more than 350,000 barrels of crude oil a day. Its partners are U.S. companies Marathon Oil, ConocoPhillips and Hess.

The strikers met Ali Tarhouni, the oil and finance minister, on Thursday and he pledged to heed their demand, said Khaled Othman, a Waha Oil construction supervisor who participated in the meeting.

No official dismissal has been announced, however. Tarhouni and Elshahab, along with Omar Shakmak, the deputy oil minister, and Nuri Berruien, head of the National Oil Co., couldn't be reached for comment.

"Now we got rid of Elshahab, people are eager to go back" to worksites, Othman said. Production at two oil fields owned by Waha could reach a combined 50,000 barrels a day within 10 days of the workers' return, he said.

Abderrauf Elhabroush, a Tripoli representative of the February 17 Coalition for oil and gas, said "There has been a decision to dismiss the chairman."

Staff "should resume work Sunday and after that people will go to the field," he said.

Elhabroush's group is comprised of oil and gas volunteers to coordinate the resumptions after the conflict.

Though it was unclear how many of 3,200 Waha's staff hadn't shown up to work because of the strike, Elhabroush had previously said the company's headquarters was empty and the company was "idle" earlier this week.

A Marathon spokesman reiterated previous statements, which include a pledge to "be back in Libya in the not-too-distant future."

With safety of employees being the first priority, "once the situation has further stabilized we will return," he said.

Hess and ConocoPhillips also have said they would resume their presence when they consider it safe or stable. Hess declined to comment Friday, and ConocoPhillips didn't immediately respond to a request for comment.

Othman said two fields, Dahra and Samah, were undamaged and, once workers come back after getting a security clearance, could restart production within days.

The Gialo field, which had an output of more than 140,000 barrels a day before the war, needs repairs to workers' accommodations but there is no damage on production facilities, Othman said.

The Waha field, with a previous output of 168,000 barrels a day, "will take time" to resume production as housing damage is compounded by fears mines could have been buried there during the conflict.

Waha still faces the challenge of restarting the Es-Sider terminal, from which its oil normally flows to global markets.

The oil port suffered damage during the war, when its metering system was broken. But National Oil Co.'s Berruien said earlier this month he expected the facility to load its first shipments by the end of the year.

Copyright (c) 2011 Dow Jones & Company, Inc.

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