Archive for '2011'

    Diplomat: Libya’s rebel-held oil facilities ‘largely undamaged’

    June 27, 2011 1:04 PM by Eric Watkins
    With Libya’s oil infrastructure thought to be largely undamaged in rebel-held areas of the country, a British diplomat said that exports of oil could resume within 3-4 weeks following the fall of the embattled leader leader Moammar Gadhafi.

    "We don't think the oil infrastructure has been particularly badly damaged physically,” said a British diplomat. “The current estimate is that in the east they can start pumping within three or four weeks.”

    The statement followed other reports that have emerged in recent weeks, with some saying that output from Libya could reach 355,000 b/d from rebel-held areas and others saying it would be marginal and not up to full capacity until 2015.

    A report by Goldman Sachs Group Inc. said that Libya’s oil exports could rise by as much as 355,000 b/d from areas held by rebel forces and up to 585,000 b/d if Gadhafi is removed from power and production resumes from western fields currently held by his government.

    Earlier, however, the International Energy Agency said that the North African country’s oil production faces a “long haul” to make a full recovery in the wake of the civil war gripping the land and that it will not return to full capacity until 2015.

    The British diplomat’s remarks came as word emerged of a team of officials from the US, UK, Italy, Turkey, Denmark and other nations which has spent several weeks in eastern Libya discussing scenarios with opposition leaders.

    "We are planning carefully and comprehensively for the days, weeks and months after Gadhafi has gone," said the diplomat. The plans, due for completion next week, include a proposed timetable for resuming oil production in areas of the country now held by forces opposed to Gadhafi.

    Rebels have held the eastern part of Libya since the outbreak of hostilities in February, and they sold their first tanker full of crude to US refiner Tesoro in April.

    Following the sale to Tesoro, the rebels scaled back their plans to export more oil after rocket attacks by Gadhafi’s forces seriously damaged a pumping station and production facilities at southeast Messla oil field on Apr. 4.

    Another attack hit a pumping station halfway along the 510 km pipeline from Messla to Tobruk port, killing eight rebels serving as guards (OGJ Online, May 17, 2011).

    Rebel Oil and Finance Minister Ali Tarhouni, without specifying a timeline, has since said that the opposition National Transitional Council hoped to “soon” resume oil production of as much as 100,000 b/d (OGJ Online, June 9, 2011).

    Contact Eric Watkins at hippalus@yahoo.com

    Sudan: Obama urges ceasefire in oil-rich south

    June 20, 2011 4:44 PM by Eric Watkins
    US President Barack Obama urged the Khartoum-based government of northern Sudan to end its military operations against southern opponents in the oil-rich border state of South Kordofan, a scene of intense fighting in recent weeks.

    "The government of Sudan must prevent a further escalation of this crisis by ceasing its military actions immediately, including aerial bombardments, forced displacements and campaigns of intimidation," said Obama, who renewed the US commitment to the peace process underway in the region.

    For several weeks, Khartoum’s military forces have been fighting southern-aligned armed groups in Southern Kordofan, the north's main oil state along the border with South Sudan, stepping up tensions ahead of the south’s independence on July 9.

    At stake in the conflict is control, or at least a share, of the country’s oil export revenues, a point stressed by the north’s Finance Minister Ali Mahmud.

    "Sudan will lose 36.5% of its income from July 9 because this is the percentage of oil revenue that the government gets from the oil produced in the south," said Mahmud.

    Khartoum receives around 50% of the oil revenues generated by the south, which produces 75% of Sudan's 470,000 b/d crude output.

    According to the US Energy Information Administration, Sudan’s oil exports represent over 90% of the country’s total export revenues, but further development is “hindered by conflicts and sanctions.”

    That view was underlined last week when Khartoum threatened to stop the southern government from using its petroleum infrastructure, which includes the 1600-km Greater Nile Oil Pipeline, several refineries, and the export terminal at Suakin on the Red Sea.

    "We have sent a letter to south Sudan, to inform them that they cannot use the pipelines or the refinery or the port after July 9 unless we reach a deal about the price of renting this infrastructure," Mahmud added.

    So far, southern officials have remained silent about plans mooted a year ago for the contraction of a new pipeline from the south through neighboring Kenya to a new export facility being planned for the island of Lamu.

    At the time, analyst BMI suggested that southern officials were concerned not to raise the ire of the northern regime.

    “Any move on the part of a future southern Sudan to assert the independence of its oil industry would likely be seen as highly provocative in Khartoum and could lead to violence” (OGJ Online, July 16, 2010).

    Khartoum is desperate to offset the looming fall in its income even as it struggles to cope with soaring inflation, a weakening currency and foreign debt of $38 billion which, together with US sanctions, has choked its sources of external financing.

    Washington has offered Khartoum a number of incentives in exchange for an orderly transition to independence for the south: gradual steps toward full normalization of diplomatic ties, the removal of Sudan from the US terrorism blacklist, and an international agreement on debt relief.

    President Obama reminded Khartoum of the stakes: "I want to speak directly to Sudanese leaders: you must know that if you fulfill your obligations and choose peace, the United States will take the steps we have pledged toward normal relations.” 500

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