Foreign Oil Producers Seek to Return to Libya after Civil WarWorld | August 22, 2011, Monday // 16:59| views
President of Italian Eni, Paolo Scaroni. Eni, a top producer in pre-war Libya, has said it is eager to restart oil exploration and production in the country as Gaddafi's rule faces an imminent end. Photo by BGNES
The opportunity of a recovery in Libyan crude output as Moammar Gadhafi's regime faces defeat has drawn mixed reactions from oil prices.
Brent North Sea crude for October delivery plummeted by USD 2.46 to USD 106.16 per barrel in late morning deals.
At the same time light sweet crude for September delivery added USD 0.46 to USD 82.72 a barrel, the trend being rather attributable to the health of US supplies.
The divergent courses of the two prices are due to the fact that Brent is expected to feel the more immediate impact from Libyan oil coming back online, whereas U.S. prices are more insulated.
Market analysts have said that Libya is not likely to be able to return to pre-uprising output levels before the end of 2011.
Libya pumped around 1.6 million barrels per day (bpd), nearly 2 percent of global supply, before the substantial slowdown caused by the rebellion which broke out in mid-February.
Output was reduced to close to nothing during the conflict.
Against that backdrop, foreign oil producers in Libya have said that they want to make sure that the situation is under control before they restore production at the closed fields.
Italy's Eni, the largest foreign producer in Libya, has said it could take a year to get fields back to full capacity.
Austrian OMV, which halted production on its Shateira oil field in February, has said that it will watch closely further developments in the country and that it does not "have any bilateral contract with the rebels".
British oil giant BP, which also evacuated its staff during the February revolt against Gaddafi, has admitted that it will seek to return to Libya and restore its exploration program "when conditions allow"
A spokeswoman for Repsol, Spain's largest oil company, has confirmed that they are monitoring events on the ground.
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