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Robinhood Investors Have A New Favorite Oil Stock

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Eni’s Libyan JV Loses 155,000 Bpd because Of Continued Blockade

Eni’s joint venture with the Libyan National Oil Corporation is losing 155,000 barrels of oil per day of production because of the continued blockade of oil export terminals and fields, according to NOC, as quoted by Reuters.

Mellitah Oil and Gas as the joint venture is called operates the El Feel and Abu Attifel fields, both of which have been shut down following the blockade. Adding the loss of daily gas production, NOC said, Mellitah is incurring losses of $9.4 million in revenues on a daily basis.

Earlier this week, NOC’s Mustafa Sanalla warned that Libyan oil production could stop completely if the blockade continued.

A group of paramilitary formations affiliated with General Khalifa Haftar’s Libyan National Army occupied the export terminals last week along with pipelines and fields. The blockade came amid continued fighting between the LNA, which is loyal to the eastern Libyan government and the forces loyal to the Government of National Accord, which is recognized by the United Nations.

NOC declared force majeure on the oil terminals, with production losses at the time estimated to reach between 500,000 and 800,000 bpd. That’s down from over 1.2 million bpd that Libya was producing before the LNA blockade. However, by Tuesday, production had dropped to just 300,000 bpd with Sanalla telling Bloomberg it could drop further to just 72,000 bpd.

Eni, which stayed in Libya throughout the ordeal that followed the removal of Muammar Ghadaffi in 2011, accounts for as much as 45 percent of the country’s oil and gas production. Libyan operations contribute 15 percent of the company’s global total output. According to Energy Voice, the Mellitah oil and gas complex is currently outside of the LNA’s control, but the group is trying to expand its presence in the area.

Eni is seeking to expand its presence in Libya as well. Last year, the Italian major said it was going to restart an exploration program with BP, but later decided to postpone the restart because of the deterioration in the security situation in the North African country.

By Irina Slav for Oilprice.com

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