Libya’s new leaders anticipate restoring the nation’s oil output “within a reasonable time,” an achievement that depends in part on overcoming threats from the elusive Muammar Qaddafi and his remaining loyalists. The pace of restoring oil production rests on how soon oil companies return their workers, said Ahmed Jehani, minister for reconstruction in Libya’s transitional administration. Companies with major investments include Italy’s Eni SpA (ENI), France’s Total SA (FP) and Marathon Oil Corp. (MRO) of the U.S., as well as Occidental Petroleum Corp. (OXY), ConocoPhillips (COP), and Hess Corp. (HES) There was little damage to infrastructure, Jehani said in an interview yesterday, and most of the required work involves restoring pressure to wells and cleaning sludge out of pipelines and storage facilities. “Many of our fields are concessions held by international companies so they are the ones that have to do the work, we can’t do it for them,” Jehani said. “It depends on how fast they deploy back to the country.” The Libyan leadership extended by a week to Sept. 10 the deadline for Qaddafi loyalists in his hometown of Sirte to surrender. Qaddafi vowed to fight on and turn the country “into a hell” in an audio recording broadcast by Syria-based Arrai satellite television. Libya Elections Mustafa Abdel Jalil, chairman of the NTC, said the rebel group would move its headquarters to Tripoli from Benghazi, and pledged to hold presidential and legislative elections within 20 months, according to Agence-France Presse. While opposition supporters now control most of Libya, Qaddafi has avoided capture. The former rebels believe he may be in one of their three key targets: the coastal city of Sirte, 280 miles (450 kilometers) southeast of Tripoli, Bani Walid, which lies 90 miles southeast of Tripoli, or Sabha, home to a major military base about 400 miles south of the capital, according to the Associated Press. Earlier this week, leaders of the international coalition that helped topple Qaddafi pledged economic and military support to Libya’s new administration as the former strongman vowed a long insurgency against his opponents. A group of about 60 nations, dubbed the “Friends of Libya,” agreed at a meeting in Paris to release billions of dollars in frozen funds for humanitarian and reconstruction needs. The meeting underscored the urgency of maintaining momentum following a five-month allied military effort. Qaddafi Threat Since then, Qaddafi has been on the run, while some of his family has taken shelter in neighboring Algeria. Family members were taken to Algeria by a team of 35 former South African special forces who were paid $15,000 each for the operation, Johannesburg’s New Age newspaper reported yesterday, citing an unidentified person who declined a request to take part in the mission. Algeria’s El Watan newspaper, citing an Algerian government official, said that Qaddafi has been in the Libyan border town of Ghadamis after Algerian President Abdelaziz Bouteflika refused to take his telephone call. That account couldn’t be confirmed. Jalil said that Qaddafi “is still a threat” and that he welcomes the support of the North Atlantic Treaty Organization. The one-day Paris meeting marked a shift from backing rebel aspirations to supporting the new leaders of Libya as they try to establish order and restore their economy. Oil Production The urgency in unfreezing Libyan government assets comes in part because it may be a year or more before full resumption of oil exports. Shokri Ghanem, Libya’s former top oil official who defected earlier this year, said he doesn’t expect production to return to pre-conflict levels of more than 1.5 million barrels a day until the end of 2012, according to the Sept. 5 issue of Petroleum Intelligence Weekly. Jehani said he expected oil production to return to pre-war levels “within a reasonable time,” though he declined to make a prediction of when. Crude oil fell yesterday on concerns fuel consumption will drop in the world’s largest economy. Crude oil for October delivery settled down $2.48, or 2.8 percent, to $86.45 a barrel on the New York Mercantile Exchange. Aref Ali Nayed, the operations coordinator for the National Transitional Council’s stabilization team, said in a separate press conference there was little damage at the Zawia refinery, and that crude supplies are resuming. Nayed said Eni and at least four other oil companies have sent advance teams to the country. He wouldn’t name the others. Nayed, a theologian who defected as ambassador to the United Arab Emirates, reiterated earlier pledges from the leadership NTC that existing oil contracts will be respected. Italian Prime Minister Silvio Berlusconi, the largest buyer of Libya’s energy output, this week said that Eni is aiming to re-open a gas pipeline between the two countries by Oct. 15. Restoring output “could be faster than some people think,” Jehani said. To contact the reporters on this story: Gregory Viscusi in Paris at gviscusi@bloomberg.net; Caroline Alexander at calexander1@bloomberg.net To contact the editors responsible for this story: James Hertling at jhertling@bloomberg.net; Andrew J. Barden at barden@bloomberg.net.

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