Libya clashes at oil ports cut output by nearly half (Al Jazeera)

Libya’s oil output has dropped by nearly half following clashes between rival groups in the country’s key oil export ports, the head of the National Oil Company said on Wednesday.

“Production has seen a reduction by 450,000 barrels per day, plus 70 million cubic feet of natural gas, equivalent to $33m in sales based on market prices,” Mustafa Sanalla told AFP news agency.

The Ras Lanuf and Al-Sidra terminals have been closed since last Thursday when armed groups attacked oil facilities held by forces loyal to renegade general Khalifa Haftar in eastern Libya.

Haftar’s self-styled Libyan National Army has since launched an offensive to push the militias out of the area, with the violence causing “catastrophic damage”, according to the state oil company.

Sanalla said the clashes “will ultimately result in the loss of hundreds of millions of dollars in construction costs, and billions in lost sales opportunities”.

On Monday, the NOC said fires caused by the clashes had destroyed two crude tanks, reducing storage capacity at the Ras Lanuf terminal by 400,000 barrels.

“Maintenance teams are still dealing with the aftermath of the blaze and are trying to ascertain the extent of the damage to the terminal,” Sanalla said.

Aside from oil infrastructure damaged by conflict, Sanalla said Libyan authorities were also struggling to “conquer the shocking scale” of fuel theft.

“The smugglers think they can operate with impunity — to the extent that the country is losing more than $750 million a year through domestic fuel smuggling alone,” he said.

Libya’s economy relies heavily on oil, with production at 1.6 million barrels a day under long-time Libyan ruler Muammar Gaddafi.

The 2011 uprising against Gaddafi saw production fall to about 20 percent of that level, before recovering to over one million barrels a day by the end of 2017.

“Those that seek to disrupt NOC operations and sequester facilities for their own gain should be seen for what they are — criminals,” Sanalla said.

“Libyan natural resources and oil and gas revenues must be a catalyst for reconstruction and national prosperity, not conflict,” he added.