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Analyst: Libyan oil predictions overblown

Analyst: Libyan oil predictions overblown
People gather at Martyr Square, formerly known as Green Square, for Eid Al-Fitr prayer on August 31, 2011 in Tripoli, Libya. Libyans celebrated their first Eid Al-Fitr in 42 years under a new regime. UPI/Tarek Elframawy | License Photo

HOUSTON, March 7 (UPI) -- Despite post-war optimism about the Libyan oil sector, an analyst at a major energy summit in Houston said there was too much hope in the forecasts.

Much of Libya's energy sector shut down last year when NATO forces imposed a no-fly zone to respond to Moammar Gadhafi's crackdown on an uprising against his regime.

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Oil companies like Italy's Eni had resumed operations in Libya by the latter half of 2011 after anti-Gadhafi forces captured Tripoli and installed an interim administration.

The International Energy Agency had said the Libyan energy sector was on pace to rebound faster than expected.

Vera de Ladoucette, a senior associate at IHS CERA, speaking at a major energy conference in Houston, said assessments about Libya's oil sector might be too optimistic, however.

"We can't expect much," she was quoted by oil and natural gas reporting Web site Rigzone as saying. "I don't see the country returning to pre-war output levels of around 1.6 million barrels of oil per day."

Authorities at the Organization for the Petroleum Exporting Countries said the country's oil industry is nearly back to normal. Internal political rivalries within the interim government and damage to Libya's transportation infrastructure could drag on overall oil export capacity, however.

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