Turmoil rocks Libya's oil sector, slashing output

By Paul Schemm

Associated Press

Published: Saturday, Feb. 26 2011 2:25 p.m. MST

A Libyan oil worker walks in front of a refinery inside the Brega oil complex, in Brega east of Libya, on Saturday Feb. 26, 2011. Production at Brega has dropped by almost 90 percent amid the country's crisis because many employees have fled and few ships are coming to offload the product.

Hussein Malla, Associated Press

BREGA, Libya — The massive oil terminal at Brega feels strangely deserted for Libya's second-largest hydrocarbon complex. After more than a week of turmoil in the country, production has been scaled back by almost 90 percent with many employees fleeing and ships not coming to collect its products.

The most activity on the site Saturday appeared to be a squad of boys from the nearby town finishing the job of tearing apart the local headquarters of Moammar Gadhafi's Revolutionary Committee.

The seaside Brega complex, some 125 miles (200 kilometers) west of the rebel stronghold of Benghazi, collects crude oil and gas from Libya's fields in the southeast and prepares it for export. It also produces some petrochemicals and refined products for local consumption.

Since the crisis began on Feb. 15, however, General Manager Fathi Eissa said the facility has had to scale back production dramatically from 90,000 barrels of crude a day to just 11,000.

There are no reliable figures about the impact of the uprising against Gadhafi on Libya's oil exports, but facilities across the country have been forced to make sharp cuts. Most Libyan ports — the main method of export — also were closed due to bad weather, staff shortages or production outages, according to the International Energy Agency.

The IEA, citing reports from Western producers, said overall crude production has dropped from 1.6 million barrels per day to 850,000. The unrest in the OPEC nation — which ranks about 17th among world oil producers and has Africa's largest proven oil reserves — has sparked a major spike in world oil prices.

At Brega, the huge spherical storage containers and reservoirs used to hold natural gas and crude oil are filling up rapidly with no ships to cart away their valuable contents.

Production in the southern fields has been throttled back until Brega can clear some of its capacity.

"At this time we are operating with the minimum required number of operators, technicians mainly," Eissa said. "The production from the fields right now is at minimum, it is not completely stopped but it is minimum."

On Saturday, a ship arrived to collect some ammonia and methanol, but it was one of only a few since the troubles began.

Brega has continued to pump natural gas for local consumption along the coastal pipeline that is keeping the power plants and desalination plants running, as well as providing the people with cooking gas canisters.

Ahmed Jerksi, the chairman of the manager's office and a 40 year veteran of the company, estimated the terminal was operating with just 45 percent of its normal manpower.

Many employees left amid rumors that Gadhafi was going to bomb the plant and its volatile contents, while others feared for their families, he said.

The neighboring petrochemical complex of Ras Lanouf, some 60 miles (100 kilometers) to the west has experienced similar drops in manpower and has had to cut production down to similar levels, Jerksi said.

Ras Lanouf is also perilously close to the town of Sirte, one of the last holdouts for Gadhafi loyalists in central Libya, raising concern about clashes in the area.

The Gulf of Sidra is critical to Libya's energy exports. The ports of As Sidra, Marsa el Brega, Ras Lanuf, Tobruk and Zuetina handle about 77 percent of Libya's oil exports. Allegiances in the Gulf of Sidra and the economic value they represent, therefore, are key to the survival of Gadhafi's regime.

Libya's uprising came to the Brega complex on Feb. 20 when inhabitants of the nearby village appeared at the gates and said the complex was now with the revolution. The facility's guards let them in and they went around and tore down the many pictures of Gadhafi.

The local headquarters of the Revolutionary Committee was also trashed, with air-conditioning units pulled out of the walls and a large-screen projection TV knocked over.

By Saturday, a group of youths had little to do besides smash windows and set fire to a picture of Gadhafi.

"We are with the revolution," said Eissa, the general manager. "We are supporting the change by keeping operations running to avoid the country's collapse."

Many of Brega's 600 foreign workers — mostly from Britain and other European countries — were preparing to evacuate. The British frigate HMS Cumberland, which took evacuees from Benghazi to Malta, is set to return to pick up many of Brega's workers. They missed an earlier evacuation at Benghazi because of the poor state of communications in the country.

Marianne Steeley of Britain has been working on and off at Brega since 1981 and is hoping her absence won't be long.

"Everybody's erring on the side of caution and they've certainly dialed down the oil and gas operation here and the ammonia plant, everything's been sort of kept on a very cautious level," she said. "I think they are trying desperately to get things going as soon as possible, I would certainly be very happy to return once things are sorted."

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