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Africa: Libyan rebels say need four weeks to assess damage to oil fields

https://www.chemnet.com   Apr 26,2011 Platts
Libyan rebels will need four weeks to assess damage to two key oil fields that came under attack by troops loyal to Libyan leader Moammar Qadhafi earlier this month, the head of the rival National Oil Company Wahid Bougaighis said Sunday.

He told a press conference in Benghazi, headquarters of the opposition Transitional National Council, that the rebels would not be able to ship any oil until installations are repaired at the Mesla field, which was attacked along with the Sarir oil field, Libya's biggest producing field.

The attacks came just one day before the TNC exported its first crude oil cargo from the eastern port of Tobruk of Sarir/Mesla blend on April 5.

There have been no shipments since the first 1-million-barrel cargo was sold to international trader Vitol.

Bougaighis said storage tanks at Tobruk were not being filled due to the halt in production from Sarir and Mesla, which were producing a combined 400,000 b/d before the crisis.

"We're in the process of mobilizing the repairs. We need four weeks to see our plans for reconstruction to give a process of a start date," Bougaighis said.

"We will not produce until we prepare the Mesla field. Until this is prepared we won't be able to ship any oil," he added.

"Presently we aren't replenishing any storage in Tobruk, and we're not presently producing anything. Whatever remains in Tobruk is dedicated to run our oil refinery in Tobruk for some of the local consumption," he said.

"We have a 20,000 b/d refinery, which provides part of the consumption in the liberated areas in the east." Qadhafi loyalists also attacked a booster pump along the pipeline that feeds the Mersa Al Hariga terminal near Tobruk from the Sarir field.

Bougaighis told Platts in an interview Saturday that the booster pump is not essential unless the field was producing at its full capacity.

He said the Arabian Gulf Oil Co., which broke away from the state-owned National Oil Company and is in charge of operations in rebel-held oil fields, is using "natural flow" to keep oil flowing through the pipeline to Tobruk at a rate of just over 20,000 b/d.

The rebels have an agreement with Qatar to market any crude oil produced in eastern fields but Bougaighis said the revenue generated from the single oil sale was not enough to meet local demand for refined products in the rebel-held areas.

"First of all you have to put things in perspective. The first shipment we sold of crude oil, we gained $129 million out of it. One cargo of imported gasoline, which is 25,000 mt, costs $75 million. You don't go far with $129 million," he told the news conference.

"Only one field has been attacked and partially destroyed," he said, adding that all other fields were shut down from Brega in the south to the west.

"Everything is shut down until repairs are done. No one is operating these facilities now, people just left," Bougaighis said. Equipment in the fields that have been shut down is intact, he said.

"At Mesla, we have most of the equipment needed to run both fields," he said, referring to Mesla and the nearby Sarir oil field.

Bougaighis said the rebels have an arrangement with Qatar to help provide refined products during what he called the "transition period." Qatar has said that it supplied four cargoes of refined product to Benghazi in recent weeks.

Benghazi, where power supply has been rationed, has one power station north of the city that runs of both natural gas and diesel, he explained.

Because the Brega refinery to the west is under Qadhafi's control and natural gas output has been halted, "we are relying mainly on diesel," Bougaighis said.

"We decreased the output of electricity by 25%, and we have around 4 hours of electricity outages. This is giving us breathing time to wait for tankers bringing in fuel from the sea. In the past we didn't have this problem when we had natural gas supplies," Bougaighis said.

Libya was producing an average 1.6 million b/d before the February 17 insurrection against Qadhafi's rule and exporting 1.3 million b/d of light sweet crude oil, mainly to Europe.

Agoco, which controls some 6 billion barrels of recoverable crude oil in eastern oil fields, was previously producing around 100,000-120,000 b/d before the attacks on Mesla and Sarir.

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