'Extended standoff' likely in Libya, analyst says
Forces loyal to Libya’s leader Moammar Gadhafi drove rebels out of Ras Lanouf, an oil terminal that has switched between the two sides several times since the uprising began last month.
OGJ Oil Diplomacy Editor
LOS ANGELES, Mar. 31 -- Forces loyal to Libya’s leader Moammar Gadhafi drove rebels out of Ras Lanouf, an oil terminal that has switched between the two sides several times since the uprising began last month.
The latest rebel setback has raised speculation that oil exports from the North African country will be long in coming as the two sides appear headed into a stand-off, with no end in sight.
"As the military situation in Libya continues to take on the look of an extended standoff, the possibility of any significant resumption of oil exports out of the country will be pushed back further," said oil advisory analyst Ritterbusch & Associates.
That view fit with the outlook of BASF SE, which said the future of its operations in the North African state is in doubt.
BASF’s Wintershall, which sealed off its eight oil fields in the Libyan desert at the end of February, is monitoring political developments there with great concern, said the unit’s Chief Executive Officer Rainer Seele.
“The question of whether, when, and how oil production can recommence in Libya is, however, still completely open,” Kassel, Germany-based Wintershall said in a statement.
The company has evacuated its foreign workers from production sites that are 1,000 km southeast of Tripoli.
While production can technically be resumed within a few weeks, the speed of a restart depends on damage to infrastructure, Seele said, adding that the fight around the oil port of Ras Lanuf has probably taken a toll.
Wintershall has operated in Libya since 1958, and the country represented 14% of BASF’s exploration and production reserves in 2009, generating about $1.8 billion in annual operating profit from Libyan oil fields.
Wintershall currently operates eight onshore oil fields in Concessions 96 and 97 with a 51% stake, while Russia’s OAO Gazprom holds the remaining 49% working interest.
Wintershall also produces from the Al Jurf 3 offshore field in the Mediterranean Sea offshore Libya as part of a consortium with Libya’s National Oil Corp. and Total SA.
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