Due to the ongoing violence in Libya, half of their oil companies have shut down in production. Italian oil giant Eni, the largest foreign oil company in Libya, declined to specify how much of its production has been shut in, saying that disclosing that information could jeopardize the remaining output.Eni produces about 250,000 barrels a day from Libya, which has a total oil output of 1.6 million barrels per day. Worldwide oil consumption is pegged at 87.5 million barrels per day.
Most of US companies are still operating. U.S.-based Marathon told CNNMoney the 45,000 barrels a day it produces in Libya has not been impacted. Occidental said its 13,000 barrels a day are also still flowing.
Several of the major oil companies, including ExxonMobil and BP have recently signed leases in Libya but are still in the exploration stages and are not yet producing any oil in the country. Those leases, worth billions, may be in jeopardy if the Libyan government collapses.
Eni said the natural gas pipeline running under the Mediterranean from Libya to Italy, which supplies 10% of that nation's gas, has been shut off, but despite that, it is still able to meet its customers' demand for gas.
If the violence in Libya goes on, it is not sure how long the rest of the oil companies can still remain in operation. If this is the case, the shock to the oil price is unpredictable.
1 comment:
Today the New York Times front page article also quoted 50% not in operation but they talked for a bit about how oil companies are rushing to get their employees out. This will probably increase the percent.
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