Libya warns of ‘catastrophic’ fallout if protest shuts oilfield

Libya’s El Sharara oilfield, pictured in this file photo, can produce 315,000 barrels a day. Reuters
Updated 10 December 2018
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Libya warns of ‘catastrophic’ fallout if protest shuts oilfield

Reuters BENGHAZI: Libya’s National Oil Corporation (NOC) warned on Sunday of “catastrophic consequences” if production at the El Sharara oilfield is brought to a complete halt by a tribal protest.
Should the 315,000 barrel-a-day field shut down, it would take a long time to bring it back on stream and production from another field would also be affected, the state oil firm said.
“Shutting down production at the El Sharara field will have catastrophic, long-term consequences. It would take a long time to resume production because of the sabotage and theft that are likely to happen,” NOC said in a statement.
Tribesmen stormed into the field premises on Saturday, saying their southern Fezzan region had suffered decades of neglect and demanding that the revenue from the oil produced at local fields be used to fund development projects.
NOC said that the storage tanks at the field would be completely full within hours of its statement, forcing the field to shut down as it cannot pump the crude out to processing facilities.
The company described the protesters as “criminals” because they had stopped the pumps from functioning.
“The company would then have to implement an emergency plan to evacuate the staff from the field,” it said in a statement.
If El Sharara stops operating, production at the El Feel oilfield, also in southern Libya, would also stop because El Sharara supplies it with power and the supply to the Zawiya refinery on the coast would also be interrupted, it said.
NOC accused security guards on Saturday of having facilitated the “occupation” of the field.
The tribesmen call themselves the Fezzan Anger Movement. Their spokesman, Mohamed Maighal, said that they would allow crude oil already extracted to be put into storage tanks, but would then force production to be stopped.
NOC has previously tried to avert such action through talks.


US-China trade deal hopes grow as oil prices decline

Updated 55 min 22 sec ago
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US-China trade deal hopes grow as oil prices decline

  • Data suggested a smaller-than-expected fall in American crude inventories
  • Preparations underway for Donald Trump to meet Xi Jinping next week at the G20 summit in Osaka

LONDON: Oil prices declined on Wednesday as data suggested a smaller-than-expected fall in American crude inventories, as hopes for a US-China trade deal continue to grow.
Brent crude futures were down 51 cents at $61.72 a barrel.
US West Texas Intermediate crude fell 25 cents to $53.65 a barrel. On Tuesday, it had recorded its biggest daily rise since early January.
After weeks of swelling, US crude stocks fell by 812,000 barrels last week to 482 million, the American Petroleum Institute said on Tuesday, a smaller fall than the 1.1-million-barrel drop analysts had expected.
Official estimates on US crude stockpiles from the US government’s Energy Information Administration are due during afternoon trading.
US President Donald Trump offered some support, saying preparations were underway for him to meet Chinese President Xi Jinping next week at the G20 summit in Osaka, Japan, amid hopes a trade deal could be thrashed out between the two powers. Trump has repeatedly threatened China with tariffs since winning office in 2016.
European Central Bank President Mario Draghi also offered a boost, saying on Tuesday that he would ease policy again if inflation failed to accelerate.
Tensions remain high in the Middle East after last week’s tanker attacks. Fears of a confrontation between Iran and the US have mounted, with Washington blaming Tehran, which has denied any role.
Trump said he was prepared to take military action to stop Iran having a nuclear bomb but left open whether he would approve the use of force to protect Gulf oil supplies.
On Wednesday, oil markets shrugged off a rocket attack on a site in southern Iraq used by foreign oil companies.
“It is interesting to note that the crude oil futures market could not rally on hawks planting bombs in the Strait of Hormuz but could rally on doves planting quantitative easing,” Petromatrix’s Olivier Jakob said in a note.
“This is an oil market that doesn’t know how to react when an oil tanker blows up but knows how to react when the head of a central bank makes some noise.”
Members of the Organization of the Petroleum Exporting Countries have agreed to meet on July 1, followed by a meeting with non-OPEC allies on July 2, after weeks of wrangling over dates.
OPEC and its allies will discuss whether to extend a deal on cutting 1.2 million barrels per day of production that runs out this month.