OPEC can make up for the loss of any crude production from Libya, Qatari Oil Minister Mohammed Saleh al-Sada said, after prices last week surged to a two-year high.
Al-Sada told reporters in Doha Sunday there is no shortage in oil supply. Concern that political upheaval in North Africa and the Middle East would disrupt supplies drove the price of crude to US$103.41 a barrel last week, the highest level since September 2008. Libya holds the largest proven oil reserves in Africa.
Al-Sada’s comments echoed those of a Saudi Arabian oil official, who said on Thursday there was no reason for oil prices to rise because Saudi Arabia and OPEC wouldn’t allow shortages to exist. Qatar and Libya are among the 12 members of OPEC, which pumps about 40 percent of the world’s oil. Saudi Arabia is the group’s largest and most influential member.
Photo: EPA
Their remarks came after more than a week of turmoil in Libya, with production scaled back by almost 90 percent and many employees fleeing and ships not coming to collect its products.
The seaside Brega complex, about 200km 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 Libyan leader Muammar Qaddafi 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 (IEA).
The IEA, citing reports from Western producers, said overall crude production has dropped from 1.6 million barrels per day to 850,000.
“Almost all international oil companies operating in Libya have reported partial or full shut-in of output,” the IEA said a statement on Friday. These companies account for about 72 percent of the North African country’s output. The status of oil fields operated by the National Oil Corp, which accounts for the remaining 28 percent of production, was “still unclear,” the Paris-based agency said.
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.
The neighboring petrochemical complex of Ras Lanouf, about 100km to the west has experienced similar drops in manpower and has also had to cut production.
Ras Lanouf is also perilously close to the town of Sirte, one of the last holdouts for Qaddafi 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 Qaddafi’s regime.
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.
TAKING STOCK: A Taiwanese cookware firm in Vietnam urged customers to assess inventory or place orders early so shipments can reach the US while tariffs are paused Taiwanese businesses in Vietnam are exploring alternatives after the White House imposed a 46 percent import duty on Vietnamese goods, following US President Donald Trump’s announcement of “reciprocal” tariffs on the US’ trading partners. Lo Shih-liang (羅世良), chairman of Brico Industry Co (裕茂工業), a Taiwanese company that manufactures cast iron cookware and stove components in Vietnam, said that more than 40 percent of his business was tied to the US market, describing the constant US policy shifts as an emotional roller coaster. “I work during the day and stay up all night watching the news. I’ve been following US news until 3am
UNCERTAINTY: Innolux activated a stringent supply chain management mechanism, as it did during the COVID-19 pandemic, to ensure optimal inventory levels for customers Flat-panel display makers AUO Corp (友達) and Innolux Corp (群創) yesterday said that about 12 to 20 percent of their display business is at risk of potential US tariffs and that they would relocate production or shipment destinations to mitigate the levies’ effects. US tariffs would have a direct impact of US$200 million on AUO’s revenue, company chairman Paul Peng (彭雙浪) told reporters on the sidelines of the Touch Taiwan trade show in Taipei yesterday. That would make up about 12 percent of the company’s overall revenue. To cope with the tariff uncertainty, AUO plans to allocate its production to manufacturing facilities in
Six years ago, LVMH’s billionaire CEO Bernard Arnault and US President Donald Trump cut the blue ribbon on a factory in rural Texas that would make designer handbags for Louis Vuitton, one of the world’s best-known luxury brands. However, since the high-profile opening, the factory has faced a host of problems limiting production, 11 former Louis Vuitton employees said. The site has consistently ranked among the worst-performing for Louis Vuitton globally, “significantly” underperforming other facilities, said three former Louis Vuitton workers and a senior industry source, who cited internal rankings shared with staff. The plant’s problems — which have not
COLLABORATION: Given Taiwan’s key position in global supply chains, the US firm is discussing strategies with local partners and clients to deal with global uncertainties Advanced Micro Devices Inc (AMD) yesterday said it is meeting with local ecosystem partners, including Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), to discuss strategies, including long-term manufacturing, to navigate uncertainties such as US tariffs, as Taiwan occupies an important position in global supply chains. AMD chief executive officer Lisa Su (蘇姿丰) told reporters that Taiwan is an important part of the chip designer’s ecosystem and she is discussing with partners and customers in Taiwan to forge strong collaborations on different areas during this critical period. AMD has just become the first artificial-intelligence (AI) server chip customer of TSMC to utilize its advanced