Despite the intensifying above-ground risks in Libya, new oil discoveries continue to prove the strong below-ground potential of the North African country, according to the latest market intelligence report by the UK-based Business Monitor International (BMI).
“The outlook for the oil sector has deteriorated considerably in recent months, with production proving erratic on the back of tensions between various segments of Libya’s fractured populace,” said the report made available to PANA here Friday.
BMI pointed out that the latest disruptions have stemmed from protesting security workers at oil fields and ports, and traders were turning, more and more, to alternative sources as they increasingly question the dependability of the country’s oil sector.
According to BMI, Libya’s strong potential was anchored recent discoveries by Sirte Oil Company, a subsidiary of the National Oil Corporation (NOC) which, in mid-August, announced it had discovered oil following the drilling of exploration wells in the prolific Sirte Basin, approximately 4km south of the Nasser oil field.
A further discovery was also made by Sonatrach Libya from the A1-96/01 well in the Ghadmes Basin in the west of the country.
In BMI’s view, however, above-ground risks in Libya remain the primary obstacle to rekindling output from the oil sector.
“While new discoveries provide some upside, we believe the continuing unrest may deter foreign interest in the sector over the long term, weighing on production and export capacity,” BMI said in its October 2013 monthly market intelligence, trend analysis and forecasts for the oil and gas industry across the Middle East and Africa.
“The intensification of unrest has brought oil production to its lowest levels since the Arab Spring,” said the report, noting that as a result of the strike at the Es Sider and Ras Lanuf crude export facilities, the Libyan government had to issue a warning to its customers regarding deliveries for the month of September.
Zueitina and Marsa Al-Haiga terminals were also seeing similar difficulties, while strikes at the Amna and Sirtica oilfields have slowed production.
Early August, Libyan Oil Minister Abdelbari al-Arusi reported oil exports had been reduced by a third to just 330,000b/d.