Short-Term Outlook Deteriorates As Unrest Intensifies
BMI View : The deterioration in Libya's secu rity situation has hit the country's oil production. We have downgraded our outlook of Libya's oil production in 2013 and see a lack of political resolution as a downside risk to our longer-term production forecasts as well. Its Upstream Risk/Reward Ratings have also fallen as we take the effects of negative political developments on its upstream potential into account.
The unrest in Libya has significantly deteriorated in the past months as oil and gas assets continue to be the focal points around which protests against the current political regime are organised. The Es Sider and Ras Lanuf crude export facilities have been forced to stop operations as a result of these protests, adding on to the country's oil export woes following similar protests that led to the closure of the Zueitina terminal.
According to Libyan oil minister Abdelbari al-Arusi, oil exports have been reduced to a third of previous levels of about 1.42mn barrels per day (b/d) to 330,000 b/d at the start of August 2013. Production continues to fall from 1.3mn b/d in June 2013 to 800,000b/d in July 2013, according to data collected by Bloomberg. Unless the political situation improves to allow Libyan crude to reach its main markets overseas, output is likely to continue to fall in August 2013.
|Perilous Drop In 2013|
|Libya Monthly Oil Production, January 2010 - July 2013 ('000b/d)|