Libya loses $7 billion to oil strikes, must find new buyers

TRIPOLI - Reuters

Recent oil strikes have cost Libya $7 billion, said the country’s oil minister. AFP photo

Libya has lost more than $7 billion and faces new competition from Algeria and Nigeria in oil markets due to strikes at oilfields and ports drying up exports, Oil Minister Abdelbari al-Arusi said on Dec. 7.

A mix of militias, tribesmen and civil servants have seized most oil ports and fields to demand more political power or higher pay, throttling Libya’s oil export lifeline.

The OPEC producer is facing turmoil as Prime Minister Ali Zeidan’s government struggles to control dozens of former militias which helped oust Muammar Gaddafi two years ago but which have refused to give up their arms.

Arusi said Libya had lost 9 billion Libyan dinars ($7.29 billion) in oil revenues after output had fallen to 250,000 barrels a day from 1.4 million bpd in July.

He did not say how much Libya is exporting, but his deputy told Reuters last week that up to 50 percent of output was being used to keep the 120,000 bpd Zawiya refinery running.

“We are facing a big problem because oil from Algeria and oil from Nigeria has entered the Mediterranean (market),”Arusi told al-Naba television station. “We have started looking for new markets in east Asia to offset the loss.”

Arusi said the government was having trouble drafting a 2014 budget due to the drop in production from 1.4 million bpd in July to 250,000 bpd now.

“We have a problem now. How are we supposed to prepare the budget?” he asked, adding that initial planning had assumed output of around 1.3 million bpd.