In its latest monthly oil outlook, the IEA analyses Qaddafi’s strategy of attacking his country’s own oil infrastructure — namely, that oil infrastructure that’s currently in rebel hands.
Attacks by Colonel Gaddafi’s forces on oil producing fields and infrastructure in the rebel‐held eastern region
in early April has raised the spectre that the country’s oil production will be offline indefinitely while the civil
war rages on. The emerging stalemate at both the diplomatic level and on the ground between government
forces and the rebels also reinforced market expectations that the crisis will be protracted. The attacks came
on the heels of the first crude cargo exported by the opposition from Tobruk, but exports have now been
suspended until security can be improved.
Libya’s output plummeted by an average 935 kb/d to only 450 kb/d in March, but production is now thought
to be completely shut‐in following three separate attacks by government forces on rebel‐controlled oilfields
in the eastern region of the country. Previously, only Libya’s ports and storage tanks in the oil towns of Es
Sider and Ras Lanuf had been damaged during the two‐month long conflict. A spokesman for the Gaddafi
regime refuted the claims, saying the damage had been inflicted by NATO forces. The opposition group
meanwhile said the strikes targeted production in a bid to halt further exports from the eastern region.
The attacks targeted oil infrastructure at the country’s largest field, Sarir, in the Sirte Basin, as well as
oilfields in the Waha and Messla areas. The three fields were producing around 100 kb/d, down sharply from
the 420 kb/d seen before hostilities erupted in late‐February. The rebel‐controlled Arabian Gulf Oil Co
(Agoco) said there was no damage to the Sarir field but that output would remain shut‐in until the area
could be secured. The extent of the damage to the other fields is not yet known, but Messla fields were
thought to have been affected most.
The attacks were likely in retaliation for the opposition’s first export of crude to international markets. The
rebel‐led Transitional National Council appeared to have navigated around the three different sets of sanctions imposed by the UN, EU and the US. It was hoped that crude exports would provide a steady flow
of funding for the rebels. The vessel Equator left Tobruk on 6 April carrying around 1.0 mb of Sarir/Messla
crude and was believed to be destined for China, though it is still unclear who the buyer was. Qatar, a
partner in the coalition with NATO, has offered to market crude exports from the opposition‐controlled
eastern area but it is not known if they were involved in this first shipment. However, Qatar reportedly has
arranged for the sale of two more shipments, which are now put on hold.
The complete production shut‐in has temporarily stalled hopes of further exports from rebel‐held territories
until security can be improved to encompass a much broader area. Damage to storage and other terminal
infrastructure can usually be repaired in short order but restarting more complex and ageing oil fields and
related infrastructure could take many months, depending on the extent of the damage. Agoco, which early
on in the conflict formally split off from the government‐controlled parent company in Tripoli, said it
planned to move forces to the desert region to protect the fields, but it is a vast area to cover with limited
resources, and has sparked fears that the Gaddafi regime will employ a scorched‐earth strategy similar to
the one Saddam Hussein implemented on his retreat from Kuwait.