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Analyst: Risk seen emerging for Libyan oil

Nov. 28, 2012 at 8:38 AM   |   Comments

LONDON, Nov. 28 (UPI) -- Political and national security concerns in post-revolution Libya, coupled with a shift to other forms of crude, may deter investors, an analyst said.

Last month, German energy company Wintershall said it was planning to build an oil pipeline for the Libyan port of Ras Lanuf by next year. The pipeline has a design capacity of 100,000 barrels per day.

The Libyan oil sector has rebounded since last year's civil war and is producing around 1.6 million barrels per day, its pre-war level. Leaders there said production could surpass the pre-war benchmark as soon as 2015.

Charles Gurdon, a director at political risk consulting group Menas Associates in London, told The Christian Science Monitor that some investors were shying away from post-war Libya.

"The political instability and security problems make it less attractive for the international oil companies and for the traders as well," he said.

A September attack on the U.S. consulate in Benghazi left the U.S. ambassador and three of his staff members dead. Internal rivalries, meanwhile, have simmered since civil war ended despite democratic gains.

The Monitor adds that some international refiners that use Libyan crude are moving away from its blend to a sour crude that's cleaner to use.

© 2012 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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