Libya on a knife-edge as strikes threaten oil supplies

Libya is facing its most critical moment since the upheaval and ousting of Muammar Gaddafi with armed groups blockading oil fields and terminals. The result is that output is now a tenth of normal levels. An economic disaster looming.

The Libyan government has been forced to import fuel to keep power stations running and queues are starting to grow at petrol stations. The prime minister, Ali Zaidan, has repeatedly threatened to send troops to retake striking ports, the Guardian reports.

But the leader of rebels Ibrahim Ali Jathran, blockading ports in Cyrenaica, home to the bulk of Libya’s oil, said such a move would be tantamount to a “declaration of war”. Jathran, commander of troops who have defected to seize the terminals, warned his soldiers would fight back. “We will resist,” he said.

The blockade has spread to western Libya, with the Elephant field on the Algerian border at a standstill and rebel oil guards further north around Zintan cutting pipelines.

The government controls just two oil ports, with production at about 160,000 barrels a day. The National Oil Corporation admits even this is guesswork, because its measuring gauges are broken, forcing officials to rely on dead reckoning.

Jathran insisted the strike was in reaction to what he said was a seizure of power – and oil revenues – by the Muslim Brotherhood in Tripoli. “The Brotherhood has hijacked the state and parliament. It has infiltrated the oil ministry with armed groups,” he said.

Government officials deny the claim, saying the strikers are trying to sell oil themselves and are holding the country to ransom.

BP declined to comment on the situation in Libya but industry experts with close links to the company said it was keeping a watchful eye on the situation.

“The fact is BP do not really need to do anything currently as they have no real investments or personnel in the country yet,” said one source. “The first sign of concern will be if they postpone drilling offshore. BP have said very publicly they planned to drill next year but they are likely to just put plans back, not announce a pull-out, like Shell.”

 

Read full article at: http://www.theguardian.com/world/2013/sep/03/libya-oil-supplies-tripoli

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