Scramble for access to Libya’s oil wealth begins
The fighting is not yet over in Tripoli, but the scramble to secure access to Libya’s oil wealth has already begun. Cliffors Krauss reports.business Updated: Aug 23, 2011 20:51 IST
The fighting is not yet over in Tripoli, but the scramble to secure access to Libya’s oil wealth has already begun.
Before the rebellion broke out in February, Libya exported 1.3 million barrels of oil a day. While that is less than 2% of world supplies, only a few other countries can supply equivalent grades of the sweet crude oil that many refineries around the world depend on. The resumption of Libyan production would help drive down oil prices in Europe, and indirectly, gasoline prices in the US.
Western nations want to make sure their companies are in prime position to pump the Libyan crude.
Italy foreign minister Franco Frattini on Monday said that Italian oil company Eni “will have a No. 1 role in the future” in the North African country. He even reported that Eni technicians were already on their way to eastern Libya to restart production. (Eni quickly denied that it had sent any personnel to the still-unsettled region, which is Italy’s largest source of imported oil.)
Libyan production has been largely shut down during the long conflict between rebel forces and troops loyal to Col. Muammar el-Qaddafi.
Eni, with BP of Britain, Total of France, Repsol YPF of Spain and OMV of Austria, were all big producers in Libya before the fighting broke out, and they stand to gain the most once the conflict ends.
The European benchmark price for oil fell moderately on Monday on speculation that Libyan oil production would quickly begin rising again. Brent crude oil prices initially dropped more than 3% but ended New York trading flat at $108.4. The American benchmark crude rose $2.01, to $84.4.
First Published: Aug 23, 2011 20:50 IST