Wintershall Braves Libya Turmoil to Crank Up Oil Field Output

  • BASF oil, gas unit sees lack of legal force, future prospects
  • Company’s onshore oil production’s back to 65% of capacity

For oil producer Wintershall AG, water shortages, power cuts and armed militias are all part of doing business in Libya.

BASF SE’s energy subsidiary is toughing it out in the oil-rich nation plagued by years of conflict that has crippled production, according to Mario Mehren, Wintershall’s chief executive. Output is gradually returning, with the company’s onshore fields now working at 65 percent of capacity since reopening in June after an 18-month halt.

“What we won’t do is to turn the key and run away,” Mehren said Wednesday. But, “no real future prospects for the country are visible.”

Wintershall has been operating in Libya for almost six decades. Its onshore production capacity is about 100,000 barrels a day from two concessions of eight fields. The country, which holds Africa’s largest crude reserves, was pumping 1.6 million barrels a day before a revolt in 2011 set off fighting among armed militias and rival administrations.

To read more on Libya’s crude output, click here

Wintershall’s employees see little sign of improvement in the volatile conditions they face every day, Mehren said. In Tripoli, water, electricity and gasoline shortages are regular occurrences, hardships that are worsened by the intermittent fighting.

“Very often, our office has to remain closed because it’s too insecure as conflicts between militias keep flaring up,” he said in a meeting with reporters in Kassel, Germany.

Wintershall is in a “sensible dialog” with Libya’s National Oil Corp. about the validity of its concessions, which run for more than 10 years, Mehren said. But that’s difficult with little progress seen in the formation of a stable government to replace various rival administrations.

The dilemma in all the talks is “that someone’s needed with whom you can discuss legally binding decisions,” he said.

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