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By Ahmed Elumami.
Tripoli, 3 September 2013:
Armed strikes at Libya’s oil fields and export terminals have brought crude oil production in the . . .[restrict]country to a virtual standstill, according to the Energy Committee of the General National Congress (GNC).
The committee confirmed, in an official statement released after a meeting yesterday, that the decline in production caused by closure of the oil facilities was now hurtling towards zero.
One employee of a major oil firm, however, told the Libya Herald that production was actually down to 60,000 barrels per day (b/d). He added that this was equivalent of zero, because it was not enough to fulfil even local demand.
The committee said that, among the political and economic consequences of the closure of the oil facilities, there would be substantial material losses for the Libyan state. The strikes had caused an imbalance in the budget, he said, which was calculated on the basis that oil production is 1.5 million with the market value of at least $90 per barrel. This has caused disruption across ministries, the committee said.
Losses have been estimated at $3 billion so far.
“The biggest damage resulting from the closure of oil facilities is the reduction in the production of oil and gas, which has caused a deficit in the general budget of the Libyan state,” Energy Committee member Fawzia Karawan told the Libya Herald.
She added that the strikes would “delay development projects of all types” and that Libya would lose respect with oil and gas clients. This, she said, would be reflected in future contracts and current fines for failing to fulfil contracts.
According to a report received by the committee from the deputy governor of the Central Bank of Libya, Karawan said, the continued closure of ports would cause a large fiscal deficit. The state could find itself unable to provide food, medicine, electricity and salaries by 2014, she said.
The Energy Committee said that the protests have also put a stop to petrol imports from abroad, which fulfil 70 percent of the country’s petrol needs. Interruptions to fuel supplies continue to cause nationwide power cuts. [/restrict]
