Two ports in eastern Libya that reopened this month after a yearlong protest may still be weeks from exporting crude because the terminals need maintenance work first, according to a ministry official.
The nation’s government gave the go-ahead on July 6 for operations to resume at Es Sider and Ras Lanuf, the largest and third-largest terminals. Work on the two facilities may take until the beginning of August, Oil Ministry Measurement Director Ibrahim Al Awami said today.
Brent crude is trading near the lowest in three months in London amid expectations that Libyan supply will rebound as export terminals reopen. The nation is producing about 550,000 barrels a day currently, according to the state-run National Oil Corp. Libya produced at a daily rate of about 300,000 barrels in June, according to Bloomberg estimates.
“There is a preventative maintenance operation underway so that loadings can resume,” Al Awami said by phone from the capital, Tripoli.
The holder of Africa’s largest oil reserves, Libya’s output had dwindled in the past year to make it the smallest producer in the Organization of Petroleum Exporting Countries. The two ports have about 7.5 million barrels in storage, according to the Oil Ministry.
“If inspections prove the material to be in better than expected shape, prices are likely to retrace,” said Michael Poulsen, an analyst at Global Risk Management Ltd. in Middelfart, Denmark. “Damages or sub-par state of the terminals could spell higher oil prices.”
Es Sider has a daily loading capacity of 340,000 barrels and Ras Lanuf 220,000 barrels, according to the oil ministry. The last loading from Es Sider goes back to March, when the rebel Executive Office for the Barqa region attempted to sell a cargo without government agreement. The U.S. Navy seized the tanker that had loaded crude under rebel supervision and handed it over to the government.
The government said yesterday it may ask for support from international forces after three days of fighting between rival militias left several people dead.
The Executive Office for Barqa relinquished the oil ports in return for a government promise to pay the salaries of Petroleum Facilities Guard members who defected to join the rebels. The group hopes that members of the new national legislature will support its demand for an oil-revenue-sharing agreement for the Barqa region to help compensate for the neglect the area experienced under Muammar Qaddafi.