Libya's oil breakdown
Image via WikipediaJust two weeks ago, Libya's oil chief boasted to reporters in Tripoli that the country's huge energy business could ride out the conflict and quickly recover. It would effectively ignore the fact that energy installations were now split between two warring halves of the country. "Integrated and unified," is how Shokri Ghanem, head of the Libyan National Oil Corporation described the energy sector, claiming that he was in close communications with staff at the vast oil fields in rebel-held eastern Libya.There is more.
That was then. Now, the oil and gas industry — on which Muammar Gaddafi depends for his regime's survival — teeters between paralysis and chaos, and energy analysts warn that it will take some time to recuperate. Ghanem's NOC, which generates more than 90% of Libya's income, is under international sanctions. New E.U. measures announced Thursday banned member states from purchasing any Libyan oil or gas.
Thousands of foreign oil executives and workers from companies such as Occidental, BP and Total, have fled the violence, leaving their Libyan staff to keep up basic maintenance as they wait out the power struggle. At least one of the oil companies under Ghanem's control, Arabian Gulf Oil, has broken with the parent corporation and pledged its output to a new rebel-run oil authority, which has yet to do a dollar's worth of business. (See TIME's exclusive photos from Tripoli.)
Even if the Libyan war ended tomorrow, energy analysts estimate that the country's production has now dwindled to between 200,000 and 300,000 barrels a day, compared with the 1.6 million pumped before the revolt. The more important statistic, however, is a big zero: That is the amount of oil and gas Libya currently exports, and by extension, the amount of hard currency Gaddafi is currently earning. "It would be very difficult, no, impossible, to export oil from Libya now," says Cliff Kupchan, director of the Eurasia Group in Washington. "And it's hard to see, in any near-term period, them exporting much oil."
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I think if the opposition prevails the oil flow will be quickly restored. The West would rather see the Libyans pay for rebuilding with oil proceeds than with aid. If Qaddafi lingers we might see an opening of the eastern oil export facilities to help the opposition sustain their efforts and pay for weapons.
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