Libya oil output facing uncertain future in post-Kadhafi era

LONDON: Libyan oil output remains shrouded in uncertainty but it could take six months to gradually return to normal, analysts said, as rebel forces looked set to bring Moamer Kadhafi's 42-year rule to an end.

Jubilant rebel forces stormed the symbolic heart of Tripoli on Sunday and fighting continued to rage on Monday near the compound of Kadhafi and in other parts of the capital city, as the end-game neared after six months of fighting.

Libya, a key African oil exporter, produced about 1.6 million barrels per day (bpd) before the rebellion broke out in mid-February -- but this has long since slowed to a trickle.

Analysts expressed uncertainty over the state of the north African country's oil infrastructure.

"We do not know what is the state of installations -- if they are damaged or how much the crude exports facilities were hit. The actual physical damage is the main question," said Dr Manouchechr Takin, head of research at the Centre for Global Energy Studies (CGES) consultancy in London.

"If there is no serious damage physically, and if things come back to normal on the political front, with a stable administration... probably it would be, I would say, six months before the Libyan oil production gets back to normal."

Takin added that it would also take time for international oil companies like BP, Eni and Repsol to move their expatriate staff back into Libya because of the uncertain security situation.

"It's not clear when they will be ready to send their non-Libyan staff back
there," he said.

"Will there be peace and safety for technical people to go to the fields and operate, or would [there] be sabotages, etc? We do not know."

Energy analyst Neil Atkinson, at consultancy Datamonitor, said the main obstacle appeared to be logistical, adding that it was unclear how quickly the Libyan opposition would be able to assemble a functioning oil ministry.

But Atkinson also estimated that production would take around six months to
recover to pre-revolution levels.

Around 85 percent of Libyan oil output was exported to Europe until the revolt disrupted the country's production.

Brent crude from the North Sea would be particularly affected by the likelihood of Libya gradually resuming supplies to the European market, analysts said.

In reaction early on Monday, Brent oil prices had briefly tumbled by more than three dollars per barrel after news of the storming of Tripoli.

However, Brent prices have recovered somewhat amid doubts over the timing of the resumption of Libyan exports, while New York crude futures remain weighed down by abundant stockpiles in the US midwest. (AFP)