Libya's Largest Oil Company Says No Oil Until Clashes End

BENGHAZI, Libya – Libya's biggest oil company will not resume production until the war ends, and that probably holds good for producers across the country, the firm's information director told The Associated Press on Sunday.

Abdeljalil Mohamed Mayuf said that the Arab Gulf Oil Co., responsible for more than a quarter of Libya's former production of 1.6 million barrels a day, stopped pumping for fear of further attacks by the forces of embattled leader Muammar al-Qaddafi.

"Everything depends on security. We can produce tomorrow but our fields would be attacked," Mayuf said in an interview. "We cannot put an army around each field. We are not a military company and the forces of Qaddafi are everywhere."

He said they were within 40 kilometers of the southeast fields at Messla and Sarir.

"We cannot say when we will restart because it depends on this military operation and when Qaddafi leaves."

He said the decision was made after rocket attacks April 4 seriously damaged a pumping station and production facilities at southeast Messla oilfield, followed, a few days later, by hits on a pumping station halfway along the 317-mile pipeline from Messla to Tobruk port. Eight rebels serving as guards were killed in the second attack, he said.

Qaddafi struck after the rebels had just begun exporting oil, following a weekslong hiatus due to fighting. The rebels had sold 1 million barrels of oil with the help of Qatar. The exports were intended to raise funds to battle the leader of 42 years, who still controls the western half of the country.

After the attacks, rebel oil chief Wahid Bugaighis said repairs to Messla would be completed in about three weeks and they would resume pumping oil.

Mayuf said Bugaighis "doesn't know what he is talking about."

Bugaighis told the AP on Saturday that he no longer has authority in the rebels' civilian National Transitional Council. His resignation apparently followed differences with Agoco. The council announced an expanded temporary Cabinet on Friday but did not name a replacement for Bugaighis.

Though it is outside his portfolio, Mayuf castigated countries that rebel officials consider to be supporting Qaddafi, in part because of votes on Libya in the Security Council. "Countries like Russia, China, India, and Brazil also has a strange position, these people should be concerned about their interests in Libya, concerned about what will happen when all Libya is free of Qaddafi," Mayuf said. China Oil, Oil India, Russia's Gazprom and Brazil's Petrobas all have investments in Libya.

Some 80 percent of Libya's oil fields and facilities are in the east of the country that has come under rebel control in the three months since citizens of the northeast port of Benghazi started the revolt against Qaddafi.

Mayuf said most oilfields in west Libya were run by Western companies who evacuated from Libya weeks ago, with production at the main western Hamada fields halting from the start of the revolt. He said the western refinery at Ras Lanouf operated with Agoco oil, so could not be productive until Agoco resumes work. Agoco provided about 15 percent of fuel for a smaller refinery at Zawiya, just east of Tripoli, he said.

Agoco, which is the biggest company operating in Libya in terms of production and the size of reserves in its oil fields, has retained skeletal staffs at all its facilities but only for maintenance of equipment, Mayuf said.

The company produced 425,000 barrels a day before the uprising, and afterward dropped to 130,000 a day.

Mayuf said Libyan oil executives long have been suspicious of the official production figure of 1.6 million barrels daily put out by Qaddafi's regime. "They've been using that figure for the past three years, but we know production has gone up and many of us suspect it was nearer 2 million (barrels) a day," he said.

He speculated the extra 300,000 to 400,000 barrels of Libyan sweet was sold on the spot market to benefit Qaddafi and a small elite clique. There was no way to verify Mayuf's speculation.

Libya produces only a fraction of world production, with most exported to Europe, but fears of similar uprisings spreading to other oil-producing Arab nations has caused world oil prices to soar.

Libya has the largest proven oil reserves in Africa, an estimated 46.4 billion barrels as of January 2011, according to Oil and Gas Journal.

Amid gas shortages and long queues, the rebel National Transitional Council issued a statement Saturday urging citizens to conserve gas, to ensure fuel supplies in all of liberated Libya, especially the besieged port of Misrata, where rockets set the main fuel supply depot ablaze last week.