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Libyan oilfields face production cut

Exploration & Production

The continuing unrest in Libya has resulted in production at Libyan oilfields being cut by more than half according to the IEA.

The majority of Libya's key oil producing areas and terminals are located in the east of the country where large swathes of territories have fallen to opposition forces seeking to oust Libya's embattled leader Colonel Muammar al Gaddafi. Fighting has taken place around the oil terminal and export hub town of Brega.

The size of the cut in Libya's oil output remains unclear partly because of disrupted communications within the country and the fast developing situation. Estimates of lost Libyan production have varied widely, from 100,000 to 1.2 million bpd.

"Based on available information, it would appear that between 850,000 to 1 million barrels per day out of a total of 1.6-million barrels per day of Libyan oil production is currently shut-in," IEA said in a statement.

Shokri Ghanem, head of Libya's National Oil Corp (NOC) and the country's top oil official under Muammar al Gaddafi, said output had dropped to 700,000-750,000 bpd.

Oil industry sources outside Libya say crude oil shipments from Libya, the world's 12th largest exporter, have almost halted because of reduced production, a lack of staff at ports and security concerns.

Libya, the 17th largest oil producer in the world, normally produces about 1.6 million barrels per day of high-quality crude, or almost 2 per cent of world output. 85 per cent of Libya's oil is exported to Europe.