Page 8 - DMEA Week 06

DMEA REFINING DMEA
Libya sees oil output decline further, takes refinery off line
LIBYA
Conditions in the Libyan oil sector have continued to deteriorate over the last week.
CONDITIONS in the Libyan oil sector have continued to deteriorate over the last week, as forces loyal to Khalifa Haftar maintain their blockade of the country’s crude export facilities.
Late last week, Libya’s National Oil Corp. (NOC) reported that oil production levels had sunk below the threshold of 200,000 barrels per day. As of February 7, it said, output was averag- ing 181,576 bpd.
This represents a significant drop from the 900,000-plus bpd figures reported prior to Jan- uary 18, when Haftar’s Libyan National Army (LNA) cut off NOC’s access to important coastal terminals and associated infrastructure. It is also more than 1mn bpd below Libya’s 2019 peak of 1.2-1.3mn bpd.
Additionally, it is the lowest level reported since 2011, when the ouster of Libya’s long-time leader Moammar Qaddafi sparked widespread civil unrest. In August of that year, crude output stood at just 45,000 bpd.
NOC has also seen refinery throughput sink dramatically. On February 10, a source inside the
company informed AFP that the Zawiya refinery had suspended operations. The plant’s two distil- lation units, which have a capacity of 60,000 bpd each, are now offline, he said.
So far, NOC has sustained losses of more than $1bn as a result of the LNA blockade.
The UN has been trying to work towards a cease-fire. Last week, it brokered talks in Cairo between the parties to the conflict, with LNA and its tribal allies on one side and the Trip- oli-based Government of National Accord (GNA) on the other. The discussions were not successful, and the UN has suggested that the factions start another round of meetings on February 18.
The LNA currently has control over most of Libya’s southern and eastern regions, where tribal leaders have long complained that they are not receiving a fair share of NOC’s revenues from oil sales. Ghassan Salame, a special envoy for the UN, said last week that revenue distribu- tion remained the primary point of contention between the LNA and GNA. ™
UAE’s Brooge secures land for oil storage expansion
UAE
Fujairah is a prime location for oil storage, just outside the Strait of Hormuz.
UAE-BASED Brooge Petroleum and Gas Invest- ment (BPGIC) has signed an agreement with the authorities in the Fujairah Free Zone (FFZ) to rent 450,000 square metres of land to expand its oil storage capability and potentially build a new refinery.
BPGIC is currently working on a sec- ond-stage expansion of its storage facilities in the Fujairah Emirate, which will raise its capac- ity from 400,000 cubic metres to 1mn cubic metres by the end of September this year. It announced plans in late 2019 for a third stage, which could add a further 3.5 mcm of space, positioning BPGIC as the largest storage oper- ator in Fujairah.
The land lease agreement for this phase was signed with the Fujairah Oil Industrial Zone (FOIZ) authority on February 6, BPGIC said in a statement. In addition to storage, the plot could potential feature an oil refinery with a capacity of up to 180,000 barrels per day (bpd). BPGIC is currently seeking financing for the new
development phase.
The company recently revealed plans to
build a new 250,000 bpd refinery that will serve ships with low-sulphur fuel compliant with IMO 2020 rules, awarding a contract to build the facility to Spain’s SENER engineering group in September last year. Under the pro- ject’s initial stage, a 25,000 bpd modular refin- ery is slated for completion before the end of the current quarter.
Fujairah is considered a prime location for oil storage, as it is situated just outside the Strait of Hormuz, a narrow waterway that carries around 17.5mn bpd of Middle Eastern crude to markets that Iran has repeatedly threatened to block. It is also one of the world’s largest bunkering hubs.
BPGIC was set up by parent company Brooge Petroleum in 2013. Last year it listed its shares on the Nasdaq stock exchange after merg- ing with US-based firm Twelve Seas Investment Co.™
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w w w . N E W S B A S E . c o m Week 06 13•February•2020