Sliding Libyan oil output brightens Nigeria’s export prospects
ABUJA – The fall-out of the Libyan political crisis that nearly crippled the country’s oil production may boost Nigeria’s exports of sweet crude next month.
As traders await the October loading schedule, they confirmed that the development had already impacted positively on September exports, which were reportedly completely sold.
“Most September cargoes are sold and differentials have been supported by outages in Libya as well as a summer maintenance-related slowdown in North Sea output. It might be another slow month for the heavy crude but the light could get some pull from Libya,” this was one West African trader’s view of how October dealing may shape up.
There were indications that oil production in the North African country may completely halt soon. The nation had last week confirmed that oil production fell to around 150,000 barrels per day (bpd), from around 250,000 bpd in August.
To add to the government’s woes, the capital, Tripoli, has been hit with water cuts for three days and electricity outages for the past few months lasting around four hours daily.
Libya’s prime minister faced increasing calls for his ouster, as strikes by government employees at oil export terminals estimated to have cost the North African country more than $5 billion in losses.
Nigeria’s light oil is apparently bridging the supply-gap in the market, as it exports 63 cargoes of crude oil, totaling 58.2 million barrels or 1.94 million barrels per day (mbpd) for the month of September 2013.
Angola is closely behind Nigeria, as it unveils plans to export 1.70 mbpd of crude in October, an increase of 30,000 bpd from September, according to a loading schedule.
Angola will export 52.8 million barrels on 55 tankers three more than were scheduled to load in September.
Prime Minister Ali Zidan has struggled to reign in the combustible mix of tribal feuds, disgruntled employees and renegade militias fueling the crisis. The country’s nascent police and army have been unable to secure the country following the eight-month-long civil war in 2011 that toppled dictator Moammar Gadfhafi.
Libya was producing 1.6 million barrels of oil per day under Gadhafi and was exporting around 1.2 million barrels daily. Production stopped briefly during the civil war, but picked up within months of Gadhafi’s capture and killing at the hands of rebels, who now comprise many of the militias.
Gunmen in the west of Libya have disrupted oil supplies used mostly for the domestic market and closed down three major pipelines.
As, at last week, only three export terminals, Marsa Brega and the Jurf and Bouri platforms, remain open. Officials said there were two vessels waiting to load at the port of Hariqa in far eastern Libya, which are having difficulty finding crude from shut oilfields.
The energy committee of the General National Assembly, in touch with senior oil officials, said in a statement that production had almost “reached zero” due to the prolonged stoppages and was “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,” the head of the GNA’s energy committee, Naji Mukhtar said.
Mukhtar said the continued strike was hurting Libya’s international credibility and risked losing it long term customers.
Libya’s central bank has warned that if the situation remains as it is through the end of the year, the country could lose its contracts with foreign companies. Bank officials said the national budget and the government’s ability to pay civil servants would also be severely impacted.
– THE GUARDIAN