BLBG:Libya Said to Ship First Cargo of Crude From West as Production Resumes
Libya may export this month its first crude cargo since March from the country’s west as the holder of Africa’s biggest oil reserves rebuilds production after deposing former ruler Muammar Qaddafi.
An 80,000 metric-ton cargo of crude is being offered for shipment from the port of Mellitah this month, three people with direct knowledge of the transaction said yesterday. The oil, equal to about 600,000 barrels, will be loaded from Sept. 15 to 17, the people said, declining to be identified because the consignment has yet to be publicly announced.
Brent crude oil gained 21 percent to $114.47 a barrel in London this year, partly because Libyan production collapsed during the conflict that began in February. The loading is likely the first from the nation’s west since March, said Thomas Zwick, an analyst at shipping consultants Lorentzen & Stemoco AS in Oslo. Libya wants to resume crude exports in two to three weeks, Guma El-Gamaty, the U.K. coordinator for the country’s National Transitional Council, said yesterday.
“This should contribute to calming down the Brent market, but we still need to see more cargoes coming out,” Thina Saltvedt, an analyst at Nordea Bank AB in Oslo who has a price forecast of $110 a barrel for the fourth quarter, said by phone. “It’s an important cargo.”
Libyan crude output slumped to 60,000 barrels a day in July from 1.7 million barrels in January, according to the Paris- based International Energy Agency, which advises 28 industrialized nations.
Zawiyah Refinery
Libya resumed operations at its 120,000 barrel-a-day Zawiyah refinery near the capital, Tripoli, about two weeks ago, El-Gamaty said yesterday. The plant is processing 30,000 barrels a day and will reach full capacity in six to eight weeks, he said. The crude-export facility in the eastern port city of Tobruk is undamaged, he said.
The shipment is the type normally carried on an aframax tanker. Charter rates for the vessels to haul cargoes across the Mediterranean Sea doubled when the conflict broke out before slumping because of reduced cargoes, according to data from the Baltic Exchange in London, which assesses freight rates on international maritime routes.
The transitional government will name a new cabinet next week and appoint a separate oil minister, El-Gamaty said. Ali Tarhouni is now the council’s oil and finance minister.
Libyan crude output increased to as much as 1.87 million barrels a day in 2008 from 1.38 million barrels in 2002, according to U.S. Energy Department data.
The cargo “can soften Brent prices in the short term, but it will need a sustained recovery of shipments to prolong this effect,” said Amrita Sen, an analyst at Barclays Capital in London.
To contact the reporters on this story: Rob Sheridan in London at rsheridan6@bloomberg.net; Alaric Nightingale at anightingal1@bloomberg.net.
To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net
