Libya Crude Output Drops as Conflict Cuts Power at Oil Fields

(Bloomberg) -- Libya’s crude production dropped below 400,000 barrels a day as the conflict in the divided North African country cut electricity supply at oil fields, according to the state-run National Oil Corp.

Output in Libya, holder of Africa’s largest crude reserves, has been hampered by a lack of security and maintenance as well as power outages, Mohamed Elharari, an NOC spokesman, said Monday by phone from Tripoli. Crude production was about 411,000 barrels a day in June, according to the most recent OPEC monthly report.

“The situation is not very good,” Elharari said. “There is poor maintenance, and there are electricity cuts at the oil fields.”

Libya produced about 1.6 million barrels a day before the 2011 rebellion that ended Muammar Qaddafi’s 42-year rule. The country is today the smallest producer in the Organization of Petroleum Exporting Countries. It has failed to restore output as militias fight for the control of export terminals while tribes and workers block operations at fields and pipelines to seek jobs and better pay.

The country has been divided since last year between an internationally recognized government that operates from the east and an administration that rules over the capital Tripoli and most of the western region. Es Sider and Ras Lanuf, the nation’s largest and third-largest oil ports, have been shut down since December following attacks by militias loyal to the Tripoli government.

“There is no change to the situation at the ports,” Elharari said. “We are trying to re-open them, but so far there is no progress.”

Libya’s challenges in boosting crude production coincide with a global excess in supply over demand for the past five quarters, the most enduring oil glut since the 1997 Asian economic crisis, according to the International Energy Agency.

To contact the reporter on this story: Saleh Sarrar in Tripoli at ssarar@bloomberg.net To contact the editors responsible for this story: Nayla Razzouk at nrazzouk2@bloomberg.net Bruce Stanley