OGJ Oil Diplomacy Editor
LOS ANGELES, Mar. 24 -- Even though Libya’s oil production is low, the resulting lack of export revenues is not an immediate cause of concern for rebel forces in the country as other sources of money are said to be available.
“Right now, there is no immediate crisis kind of need for cash,” said Ali Tarhouni, a US-based economist who has been appointed finance minister in the National Council under a brief that also includes oil.
Tarhouni said oil is not an immediate issue because the only significant production is coming from the Sarir and Sidra fields, which amount to just 130,000 b/d.
“We have some liquidity that allows us to do the basic things,” Tarhouni told the Associated Press in an interview, adding that many countries have agreed to provide the rebels with credit backed by the Libyan sovereign fund.
Tarhouni also said the British government has agreed to give the rebels access to 1.4 billion dinars ($1.1 billion) that London did not send to Gadhafi.
It was not immediately clear if some of that money is to come from the $160 million that British authorities seized earlier this month on a Libya-bound ship after escorting the vessel to an English port.
"The cargo is understood to contain a significant quantity of Libyan currency, which is subject to a UN sanction," said a Home Office spokesman, who confirmed the value of the currency find.
The ship was on its way to Britain after trying to dock at the Libyan capital of Tripoli, where it decided it was too unsafe due to the unrest in the North African country.
Tarhouni’s statements about the country’s oil production coincided with other reports that Arabian Gulf Oil Co., based in Benghazi, in eastern Libya, is producing less than 25% of its normal output of oil.
Abdel Jalil Mayuf, Agoco information manager, said output was now about 95,000 b/d, down from the usual 400,000 b/d, a further decline from last week when another official out output at about a third the usual rate.
Mayuf said Agoco is producing from two fields—Sarir and Misla—and that a return to normal production could take about 2 weeks, depending on the security situation.
Mayuf confirmed that oil was being piped to Tobruk in northeastern Libya, where it is being stored, but that no tankers are in port to ship it out.
When asked who would receive revenues from Agoco sales of oil, Mayuf expressed the belief that it will be with the rebel National Council, and that new contracts are being drawn up.
Agoco officials earlier announced plans to start marketing oil separately from its parent company, Libya’s state-owned National Oil Corp. But that might be difficult after Agoco was named by the US Department of the Treasury among 14 Libyan companies subject to sanctions.
In addition to Tobruk, Agoco normally pipes oil to Ras Lanuf, scene of recent fighting between rebels and forces loyal to Libya’s leader, Moammar Gadhafi.
But Agoco officials said they have stopped supplies to Ras Lanuf since Gadhafi’s forces retook the town last week.
Oil rose for a fourth day, advancing as much as 0.5%, after attacks on Gadhafi’s forces intensified, raising concern crude supplies from Africa’s third-biggest producer will fall even more.
Crude for May delivery rose as much as 94¢ to $106.69/bbl in electronic trading on the New York Mercantile Exchange.
OPEC meeting postponed
Meanwhile, the Organization of Petroleum Exporting Countries has postponed its next formal meeting to reassess output policy to June 8, from June 2 as was previously announced, to enable all ministers from the 12-member group to attend.
OPEC officials have frequently downplayed suggestions of the need to call an extra meeting before June, arguing that the market has enough oil and that “factors beyond OPEC’s control” are responsible for an oil price well above $100/bbl—a reference to oil speculators.
“When I look to the inventory, I see that the inventory is very high, over 60 days,” said Abdullah Al-Attiyah, deputy prime minister and former oil minister of Qatar, an OPEC member.
As a result, Al-Attiyah said there is no need to call a special meeting of OPEC to address the situation—a view that is unlikely to ease the concerns of traders caused by a string of adverse events in the region (OGJ Online, Mar. 21, 2011).
Contact Eric Watkins at email@example.com.