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OPEC March oil output sinks to 11-month low – Reuters survey

Comments (0) Actualites, Middle East, Oil

LONDON (Reuters) – OPEC oil output fell in March to an 11-month low due to declining Angolan exports, Libyan outages and a further slide in Venezuelan output, a Reuters survey found, sending compliance with a supply-cutting deal to another record.

The Organization of the Petroleum Exporting Countries pumped 32.19 million barrels per day last month, the survey found, down 90,000 bpd from February. The March total is the lowest since April 2017, according to Reuters surveys.

OPEC is reducing output by about 1.2 million bpd as part of a deal with Russia and other non-OPEC producers to get rid of excess supply. The pact started in January 2017 and runs until the end of 2018.

Adherence by producers in the deal rose to 159 percent of agreed cuts from 154 percent in February, the survey found. There was no sign that other producers had boosted output to cash in on higher prices or to compensate for the Venezuelan decline.

Oil has topped $71 a barrel this year for the first time since 2014, and was trading above $67 on Wednesday. Still, OPEC says supply restraints should be maintained to ensure the end of a glut that had built up since 2014.

In March, the biggest decrease in supply came from Angola, which exported 48 cargoes, two fewer than in the same month of 2017. Natural declines at some fields are weighing on output.

Production in Libya, which remains unstable due to unrest, slipped because of stoppages at two fields, El Feel and El Sharara, setting back 2018’s partial recovery in output.

And production fell further in Venezuela, where the oil industry is starved of funds because of an economic crisis. Output dropped to 1.56 million bpd in March, the survey found, a new long-term low.

Output in OPEC’s largest producer, Saudi Arabia, dropped by 40,000 bpd from February’s revised level, even further below the kingdom’s target.

OPEC’s No. 2 producer, Iraq, pumped more. Exports from the south, the outlet for most of the country’s crude, rose despite maintenance at a loading terminal. Exports declined from the north but domestic crude use increased.

Among others with higher output, the biggest rise came from the United Arab Emirates, where production had dropped in February due to maintenance. Even so, the UAE is still pumping below its OPEC target and showing higher compliance than in 2017.

Output climbed in Qatar, after a dip in February that sources attributed to maintenance. Nigeria also pumped at a higher level, extending a run of more stable supply from Africa’s top exporter.

Nigeria and Libya were originally exempt from cutting supply because their output had been curbed by conflict and unrest. For 2018, both told OPEC that output would not exceed 2017 levels.

OPEC has an implied production target for 2018 of 32.73 million bpd, based on cutbacks detailed in late 2016 and taking into account changes of membership since, plus Nigeria and Libya’s expectations of 2018 output.

According to the survey, OPEC pumped about 540,000 bpd below this implied target in March, not least because of the involuntary decline in Venezuela.

The Reuters survey is based on shipping data provided by external sources, Thomson Reuters flows data and information provided by sources at oil companies, OPEC and consulting firms.


(By Alex Lawler; Additional reporting by Rania El Gamal in Dubai; Editing by Dale Hudson)

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Libya sovereign fund claimant denounces U.N.-backed govt’s management plan

Comments (0) Latest Updates from Reuters, Politics


By Claire Milhench

LONDON (Reuters) – A claimant to the chairmanship of Libya’s $67 billion sovereign fund on Monday denounced the appointment by the country’s United Nations-backed government of a panel to run the fund, saying he had not been formally asked to step down.

Last week, the Government of National Accord (GNA) appointed a five-member caretaker committee to run the Libyan Investment Authority (LIA). The announcement was welcomed by Western governments, but it did not list AbdulMagid Breish amongst the panel members.

The GNA was designed to resolve a conflict that flared up in 2014, when an armed alliance took control of institutions in Tripoli and the newly elected parliament relocated to the east.

The hope was that it would reunify institutions such as the central bank and the LIA, but opposition to the GNA continues with the parliament in the east of Libya voting on Monday against a motion of confidence in the Tripoli-based administration.

The LIA has been hampered by a long-running leadership dispute, which mirrors the split nature of the country and its institutions following the fall of Gaddafi in 2011. This has led to multiple individuals claiming to lead key bodies such as the LIA, the central bank and the national oil company.

Breish was one of two men who claimed to be chairman of the LIA. He was appointed chairman in June 2013, but stepped aside a year later, then said he had been reinstated following a decision by the Libyan Court of Appeal.

His rival, Hassan Bouhadi, was appointed chairman by the authorities in the east of Libya. But he resigned earlier this month, saying political infighting had made it too difficult for him to carry out his duties.

He has been replaced by Ali Shamekh, who was installed as chief executive officer of the LIA by the Tobruk-based board of trustees.

In a statement issued on Monday, Breish questioned whether the GNA’s move complied with Libyan law and challenged the technical expertise of the five-member panel.

The statement said Breish had not yet received a formal notice mandating him to hand over his responsibilities, but on receipt of this, he would make an application to the Libyan courts to clarify the legal position.

“While I accept and share the Government of National Accord’s desire to unify the Libyan Investment Authority, it is my responsibility as chairman and CEO to ensure that it is done in compliance with Libyan law, that the technical expertise is in place to manage the institution and its funds, and that multi-million dollar litigations that we are pursuing in overseas courts are not adversely affected,” he said.

“I am therefore seeking an expedited court ruling to clarify the current legal position.”

The LIA is currently embroiled in two lawsuits against investment banks Goldman Sachs and Societe Generale, seeking over $3 billion lost in trades carried out under the Gaddafi regime.

Breish’s statement added that he was holding discussions with the directors of the Tobruk-appointed board of trustees, with the aim of establishing a single, united board of directors. A formal meeting is expected early next week, it said.


(Editing by Ralph Boulton and Andrew Roche)

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Technip signs $500 mln deal to refurbish Libya’s Bahr Essalam oil platform

Comments (0) Business, Latest Updates from Reuters, Middle East

PARIS (Reuters) – French oil services company Technip has signed a deal worth $500 million with a consortium that includes Libya’s National Oil Company (NOC) and Italy’s oil and gas major ENI to refurbish an offshore oil platform.

A statement from the French foreign ministry where a Libyan delegation was visiting on Tuesday, said the platform is for the Libya’s Bahr Essalam oil field off Tripoli.

The deal was signed by NOC’s chief executive Mustafa Sanalla and Technip’s CEO Thierry Pilenko.


(Reporting by John Irish; Writing by Bate Felix; Editing by Ingrid Melander)

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Tanker begins delayed oil loading at Libya’s Hariga

Comments (0) Business, Latest Updates from Reuters, Middle East

BENGHAZI, Libya (Reuters) – A tanker that had been blocked for three weeks in a stand-off over oil exports at the eastern Libyan port of Marsa al-Hariga entered the port and began loading on Thursday, officials said.

The Seachance, which had been waiting to load oil for Glencore on behalf of the Tripoli-based National Oil Corporation (NOC), was loading 600,000 barrels for shipment to Britain, port and oil officials said.

Exports from Hariga have been blocked since early this month due to a dispute between competing eastern and western branches of the NOC.

The blockage reduced production from the eastern Messla and Sarir fields, lowering Libya’s output to around 200,000 barrels per day (bpd), a fraction of the 1.6 million bpd the OPEC member country was producing before the toppling of leader Muammar Gaddafi in 2011.

The heads of the two NOC branches reached an agreement in principle to resume shipments at talks held in Vienna last weekend, but details of the deal were not made public.

If further shipments are allowed to leave Hariga Libya could quickly raise its output to more than 300,000 bpd.

The Messla and Sarir fields were previously producing more than 200,000 bpd, though Omran al-Zwai, a spokesman for eastern NOC subsidiary AGOCO, said the company needed a budget for new equipment to ensure maximum production.

The oil dispute is tied up in the broader conflict between rival political and armed factions in Libya. The NOC in Tripoli is working with a new U.N.-backed unity government to try to revive oil production, but its rivals in the east tried last month to export a tanker of oil independently.

After the tanker was blacklisted and forced to return to a western Libyan port, the eastern NOC prevented the Seachance from loading at Hariga.

Oil trader Glencore, which had been exporting crude oil from the port under a deal reached late last year, on Thursday declined to comment.

In the past three years a combination of labour disputes, factional rivalries and security threats have shut down some of Libya’s key oil fields and facilities.

But the eastern ports of Hariga and Brega have continued to operate. On Wednesday a tanker loaded 600,000 barrels of oil at Brega for shipment to Italy, a port official said.


(Reporting by Ayman al-Warfalli and Ahmad Ghaddar; writing by Aidan Lewis; editing by Greg Mahlich and Jason Neely)

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Libya joins Iran in snubbing oil freeze

Comments (0) Business, Latest Updates from Reuters, Middle East

LONDON (Reuters) – Libya does not plan to attend an April 17 meeting of oil producers about freezing supply to support prices, a Libyan OPEC delegate said on Tuesday, joining fellow OPEC member Iran in snubbing the initiative.

The absence of the two OPEC members would limit the impact of any freeze by producers from the Organization of the Petroleum Exporting Countries along with Russia, even though Libya’s output has been curtailed for many months by unrest and the chance of it increasing production swiftly is low.

“We are not going,” the Libyan delegate said, referring to the meeting in Doha next month. “Clearly, they have to allow us to go back to our production when the security situation in the country improves.”

Libya has made its wish to return to pre-conflict oil production rates clear since four countries reached a preliminary deal on freezing output in February.

Other producers understand this, the delegate said. “They appreciate the situation we are in.”

Qatar, which has been organising the meeting, has invited all 13 OPEC members and major outside producers. The talks are expected to widen February’s initial output freeze deal by Qatar, Venezuela and Saudi Arabia, plus non-OPEC Russia.

The initiative has supported a rally in oil prices, which were about $41 a barrel on Tuesday, up from a 12-year low near $27 in January, despite doubts over whether the deal is enough to tackle excess supply in the market.

Iran has yet to say whether it will attend the meeting. But Iranian officials have made clear Tehran will not freeze output as it wants to raise exports following the lifting of Western sanctions in January.

The potential volume Libya and Iran could add to the market is significant. But conflict in Libya has slowed output to around 400,000 barrels per day since 2014, a fraction of the 1.6 million bpd it pumped before the 2011 civil war.

Iran produced about 2.9 million bpd in January and officials are talking about adding a further 500,000 bpd to exports. So far though, Iran has sold only modest volumes to Europe after sanctions were removed.


(By Alex Lawler. Editing by David Clarke)

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Glencore sees Tripoli-based NOC as sole legal seller of Libyan oil

Comments (0) Business, Latest Updates from Reuters, Middle East

LONDON (Reuters) – Commodities trader Glencore said on Thursday it recognises Libya’s Tripoli-based National Oil Corp. (NOC) as the sole legal marketer of the country’s oil, after securing an export deal earlier this year with the state-run company.

The NOC has said it operates independently of either the rival government that controls the capital city or the internationally recognised government based in the east of the country, which earlier this year set up a separate NOC.

“International oil companies and the international community fully support NOC’s position,” said Alex Beard, head of oil at Glencore.

“They have made it very clear there is no alternative to the NOC at its legal address in Tripoli as the only recognised marketer of Libyan oil,” he said in a statement.

Bloomberg reported last week the government in the east would prevent any tanker operated by Glencore from loading oil at Libyan ports if it did business with the Tripoli-based NOC.

Under the arrangement with the existing NOC, which began in September, Glencore loads and finds buyers for all the Sarir and Messla crude oil exported from the Marsa el-Hariga port near the country’s eastern border with Egypt.

While Libyan oil exports peaked at 1.6 million barrels per day, battles between rival factions seeking to control the country, as well as strikes and blockades by local tribes, have kept production under 0.5 million bpd for most of the past year.

Mustafa Sanalla, the chairman of the Tripoli-based NOC, on Thursday reiterated comments told to Reuters in an interview earlier this month, that Libya’s oil partners and the international community fully backed the company, despite attempts by the recognised government in the east to set up a parallel oil payments system.

“The NOC, at its legal address in Tripoli, remains the only legally empowered oil contracting authority of the Libyan state,” Sanalla said.

“It remains the seat of contracts for all the production, transportation and sale of Libyan oil. The board of NOC is committed to protecting the integrity and viability of the NOC.”


(Reporting by Dmitry Zhdannikov, writing by Amanda Cooper; Editing by David Evans)

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