Total, OMV Join Eni in Cutting Back Libyan Production on Growing Violence

Total SA and OMV AG became the latest energy producers to scale back their Libyan operations as growing violence resulted in the loss of a fifth of the North African nation’s oil output.

Total, Europe’s third-largest oil company, started to reduce oil output in Libya and repatriate staff, following in the footsteps of Eni SpA, RWE AG and BASF SE’s Wintershall unit. OMV slumped the most in 20 months in Vienna as central Europe’s biggest energy producer warned it wouldn’t be able to make up the shortfall from lost Libyan production elsewhere.

“In total, some 300,000 barrels per day are now offline,” said Edward Meir, a senior analyst at MF Global Ltd. in London. “The numbers could rise as we still do not have a clear idea how much oil is being impacted by striking Libyan workers deep inside the country.”

Libyan leader Muammar Qaddafi vowed to fight a growing insurrection until his “last drop of blood,” sending New York oil futures to a 29-month high today. Libya pumped 1.6 million barrels a day in January, according to Bloomberg estimates.

Repatriating staff remains Total’s priority in Libya, said Phenelope Semavoine, a spokeswoman for the Paris-based company. Total’s Libyan operations last year accounted for 55,000 barrels a day, or about 2.6 percent of the company’s worldwide production.

OMV plunged as much as 7.9 percent, the steepest intraday drop since June 2009. The shares were down 6.1 percent at 29.97 euros as of 12:35 p.m. local time.

Staff Evacuated

The company’s output in Libya last year was about 33,000 barrels a day, or 10 percent of its total. Earlier this week, it evacuated all non-essential staff from the country.

“We rather expect that production will come to a standstill for a certain period of time for safety reasons” in Libya, Chief Executive Officer Wolfgang Ruttenstorfer said in an interview with Bloomberg Television.

OMV said late last night that due to the political unrest in Libya it expected a temporary reduction of its production and couldn’t exclude a complete halt. The company reported fourth- quarter profit today that missed analysts’ estimates.

“We believe that the market reaction will not only be on today’s figures, but also to the further developments of the political situation in Libya,” said Philipp Chladek, an analyst at Raiffeisen Centrobank in Vienna. He has a “hold” rating on OMV.

Temporary Suspension

Italy’s Eni, the largest foreign oil producer in Libya, said yesterday that some oil and gas operations in the country have been temporarily suspended, while Repsol said it was also halting exploration and production.

Eni, which drilled in Libya during the whole of Qaddafi’s 41 years of rule, pumps 244,000 barrels of oil equivalent a day, or 14 percent of the company’s total production in the North African country.

The Italian producer said yesterday that it has pulled out most of its staff, leaving only 34 workers in Libya. Other companies like BP Plc and Royal Shell Dutch Plc have already suspended exploration, while Statoil ASA has closed its office in Tripoli.

“A peaceful solution in Libya looks unlikely for now as Qaddafi indicates that he won’t go quietly,” Richard Griffith, a London-based analyst at Evolution Securities Ltd., wrote in an e-mailed report. “The more significant impact is probably on Eni.”

Third-Largest

Libya is Africa’s third-largest oil producer after Nigeria and Angola. In terms of proven oil reserves, Libya’s 44.3 billion barrels is the largest deposit in Africa and 3.3 percent of the world’s total, according to BP Plc’s Statistical Review of World Energy.

Three Libyan cargo ports are reported to have closed and shipping lines will divert containers of goods to Italy, according to Tuscor Lloyds, which sends about 50 shipments a month to the country.

Tripoli, Benghazi and Misurata have halted operations, Neel Ratti, shipping manager at Tuscor Lloyds in Manchester, England, said by phone today.

Eni said yesterday that gas supplies from the north African country to Italy through its Greenstream pipeline were halted. Italy gets about 10 percent of its gas from Libya through the pipeline to Gela in Sicily.

Italy can replace missing gas with supplies from Algeria, Azerbaijan, Russia and the Gulf countries, Italian Foreign Minister Franco Frattini told Parliament today.

To contact the reporters on this story: Zoe Schneeweiss in Vienna at zschneeweiss@bloomberg.net. Alessandra Migliaccio in Rome at amigliaccio@bloomberg.net

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net.

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