Page 8 - AfrOil Week 11 2020
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AfrOil PERFORMANCE AfrOil
Libyan crude production sinks below 100,000 bpd
LIBYA
LIBYAN oil production has met another grim milestone by falling below the threshold of 100,000 barrels per day (bpd).
On March 15, the state oil company said in a statement that output levels had dropped to 91,108 bpd. It also stressed that the decline in production was not voluntary, but rather a con- sequence of ongoing unrest in Libya.
“NOC is concerned about a likely fuel short- age in the near future after the forced reduction of local production, the Zawiya refinery shut- down and the lack of government funding to import sufficient fuel to serve the basic needs of Libyans. All this is a result of the illegal block- ade of oil facilities,” said the company, which is known as National Oil Corp. (NOC).
The statement was referring to efforts by the Libyan National Army (LNA), which is loyal to military commander Khalifa Haftar, to seize Tripoli and other parts of the country from the UN-recognised Government of National Accord (GNA). LNA launched a campaign to expand its sphere of influence beyond the eastern and southern regions of the country in January of this year. In the process, it has seized Libya’s main coastal crude export terminals, thereby forcing the shutdown of key pipelines and the Zawiya oil refinery, as well as upstream fields.
As noted above, NOC has said it fears that the drop in production, along with the contin- uation of the conflict, will lead to fuel short- ages throughout Libya. But according to Ali al-Saeedi, a member of the country’s parliament, supplies are already inadequate in the southern
regions. Black marketers are bringing some fuel to the south, he told Asharq Al-Awsat, but the number of security personnel in these regions is “not sufficient to monitor tanks and smug- gled cargo across the border and from the vast desert.”
Al-Saeedi went on to say that Libya’s eastern regions also needed help because they could not pay for the fuel they needed. This part of the country will require more assistance from the government, he said.
He was speaking shortly before GNA passed a budget for 2020 that took the collapse in world oil prices and the fall in Libyan production into account. Libya remains highly dependent on crude oil revenues, and the clash between GNA and LNA arises partly from disputes over how to split the money between the central government and the regions.
Tullow Oil optimistic about 2020, despite lower oil prices
Libya’s Zawiya refinery is now offline (Photo: NOC)
REGIONAL
TULLOW Oil (UK/Ireland) has had a diffi- cult year, owing to setbacks in Guyana, Ghana, Uganda and Kenya.
The company, which focuses on upstream projects in Africa and South America, is likely to experience more setbacks in the short term, as the slump in oil prices will make its projects less profitable. Even so, it has said it hopes to ride out the storm.
In a report on its 2019 performance, Tullow said it had taken steps to protect itself against market fluctuations. Specifically, it reported that it had hedged a significant part of its production.
“Tullow prudently manages its commodity
risk and is well hedged, with 60% of 2020 pro- duction hedged at a floor price of $57 per barrel
and 40% hedged at a floor price of $52 per barrel
for 2021,” it said in the statement.
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w w w . N E W S B A S E . c o m Week 11 18•March•2020
