Eric Watkins
Oil Diplomacy Editor
Even as rebel forces last week were sweeping into Libya's capital of Tripoli, speculation was mounting in the international oil and gas industry about just when the North African country might resume oil exports.
"At the moment, it is too early to predict when, how, and under what conditions the production in Libya might begin again," said Wintershall AG, a wholly owned unit of German chemicals giant BASF SE.
"Starting up production could be done within several weeks under standard technical conditions," Wintershall said, adding that much "depends on the state of the export infrastructure as well as a stable security situation."
The importance of security was recognized even by the rebels who were poised to assume control of the country last week, even as the whereabouts of Libya's erstwhile leader remained unclear.
Security needed
"We have Libyan oil companies and can start anytime if security is approved," said Abdeljalil Mayouf, information manager at the rebel-run Arabian Gulf Oil Co.
"We can start without the foreign companies," said Mayouf, who added that security forces hired from the former Libyan army were already present at the fields and the firm was waiting for their clearance to start production.
As one observer noted, Gaddafi's fall will reopen the scramble for Africa's largest oil reserves, giving new players such as Qatar's national oil company and trading house Vitol the chance to compete with the already-established European and US oil majors.
But some countries, like Russia, China, and even Brazil, may find themselves with little or nothing to do in Libya due to their lukewarm support of the rebels through their struggle to topple the Gadhafi regime.
Political issues
"We don't have a problem with Western countries like the Italians, French, and UK companies. But we may have some political issues with Russia, China, and Brazil," said Mayouf.
Regardless of who has more influence in the country and who has less, though, the one dominant point to be addressed by anyone is the speed with which the country can be put back on track to produce and export oil.
"The pace of recovery of the Libyan oil industry is still hard to gauge, as the extent of damage to oil producing—and more importantly, exporting and refining—capacity still remains virtually unknown," said IHS Global Insight's Samuel Ciszek.
"Moreover, reorganizing supply chains to remote oil fields in order to get workers back—including large numbers of expatriates—will be a daunting task, potentially taking several months in itself," Ciszuk said.
Meanwhile, according to oil trade and author Dan Dicker, "You're not going to see a barrel of oil from Libya for at least a year."
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