Libya oil output said to drop with pipe work lasting a week

By Salma El Wardany on 12/27/2017
CAIRO (Bloomberg) -- Libyan crude production fell below 1 MMbpd as the country’s crucial energy infrastructure was once again targeted by violence.

The disruption in the North African nation lifted oil prices to a two-year high on Tuesday, offsetting the impact from the return of a major UK North Sea pipeline from a shutdown. The halt keeps output below the cap Libya agreed last month with the Organization of Petroleum Exporting Countries and allies including Russia.

The OPEC member’s production dropped to 950,000 bpd on Wednesday, a person directly involved in the matter said. Production was 1.08 MMbpd as of Dec. 18, indicating a drop of 12%. The pipeline will need about a week for repairs, two other people familiar with the situation said. All three people asked not to be identified because they’re not authorized to speak to the media.

The pipeline carries crude to Es Sider, Libya’s biggest export terminal. Loadings at the port are down about 50%, one of the people said. Es Sider was scheduled to ship 13 cargoes this month, each carrying 600,000 bbl of crude, according to a loading plan obtained by Bloomberg.

Several meters of the pipeline were damaged, puncturing it with two holes, and emergency staff is on site, one of the people said. Operator Waha Oil Co. called the explosion a “sabotage act,” and is ready to move to the site after getting clearance from security, according to a statement Wednesday on its website. The blast occurred 130 km (81 mi) south of Es Sider, the state-run National Oil Corp. said Tuesday.

Brent crude, a global benchmark, dropped 0.9% in London after gaining 2.7% to the highest since May 2015 on Tuesday following the Libyan disruption.

Libya boosted production to above 1 MMbpd in July for the first time since 2013, according to data compiled by Bloomberg. The country has struggled to maintain that level of output following stoppages at ports and pipelines. Production dropped to 890,000 bpd in August.

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