Oil industry in Libya is being sabotaged by employees and militant groups. In the last two months oil production now stands at less than 100,000 barrels per day. Libya which once was 17th in world oil production rankings is facing huge problems as militant groups are not letting the oil production continue as they have imposed a blockade on oilfields and terminals.
The hiatus has caused this North African country more than $5 billion in losses and due to that protesters are even asking for the ouster of Libya’s prime minister. Strikes by government employees at oil export terminals were recently joined by armed militants and defected soldiers which has further aggravated the situation.
Ali Zidan Facing Huge Problems
Once a net exporter of oil the Libyan government is left without a choice; now it imports fuel due to the continuing stalemate in the country. This was well expected since the beginning of the post-Moammar Gaddafi period, it was clear there would not be peace, but a lot of struggle as the militant groups who fought against the dictator are now working as pressure groups and want their share in power and profits.
A major problem for Prime Minister Ali Zidan has been to control the combustible mix of tribal feuds, disgruntled employees and renegade militias who have been generating unrest after Moammar Gaddafi was killed. Another handicap he is facing is that Libya has new police and army which do not have much experience handling the experienced militia groups.
Closure of Onshore Oil Facilities
Major blow for oil production in Libya came when several of the onshore oil facilities were closed that led to the fall in production. Even Libya’s Deputy Oil Minister Omar el-Shakmak admits that the ongoing situation will have a grave impact on the national economy. The current oil production of 150,000 barrels per day is less than 10 percent of its pre-war levels.
Warning from Libya’ Central Bank
The central bank of Libya has warned that the country may lose its contracts from foreign companies if the situation continues like this. The net loss due to less oil production may lead to financial losses for the government and which in turn may not be able to pay civil servants.
As Libya is facing a shortage of diesel fuel oil for electricity plants due to sit-ins, the government is mulling several plans to disperse them; one of them could be using force.
To contact the reporter of this story: Jonathan Millet at email@example.com