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Saudi raises Dec oil output slightly, pumps 9.8 mln bpd Libya will sue, cut off firms buying oil from seized ports

KHOBAR, Jan 9, (RTRS): Saudi Arabia produced 9.819 million barrels per day (bpd) of crude oil in December, up from 9.745 million bpd in November, an industry source familiar with the matter said on Thursday. The world’s largest oil exporter also raised supply to the market to 9.897 million bpd in December from 9.448 million bpd in November. Supply to market may differ from production depending on movement in or out of storage. “Production was up and supply was up. This is a sign it’s a strong market, stronger than many people anticipated,” the source said. The rise in production comes at a time when Saudi burns less crude oil during winter, which allows it to export more. The Saudi kingdom kept production in November at steady levels from October when it cut output after pumping at record rates of around 10 million bpd for three months running to help offset a plunge in output from fellow OPEC member Libya. Libya is now producing around 650,000 barrels per day (bpd) of oil, of which 510,000 bpd is being exported, Oil Minister Abdelbari Arusi said on Wednesday.

As for Iraq, OPEC’s second largest producer, its oil industry and foreign investors see no cause to panic after al-Qaeda militants seized major towns last week — troubled Anbar province. The Organization of Petroleum Exporting Countries agreed early December to renew for six months its 30 million barrel-a-day output cap for the first half of 2014. Both Iraq and Iran, second and third in the OPEC producers’ league table after Saudi Arabia, wasted no time in making clear they have no interest in contributing to a collective cut should one be required next year. Some speculated Saudi Arabia would need to cut output further towards 9 million bpd by the middle of next year, however for now the kingdom shows no signs of curtailing production.

Libya will take to court any foreign firms trying to buy oil from eastern ports seized by armed protesters and stop doing business with them, its oil minister said on Wednesday.
Tensions between the Tripoli government and an armed grouping controlling three eastern oil ports escalated when the navy fired on Sunday at a tanker trying to load crude in Es-Sider, one of the occupied terminals.
The protesters, demanding greater power and a share of the oil wealth, said on Tuesday they had invited foreign firms to buy crude from them and guaranteed the safety of any tankers coming in.
“Any firm ... dealing with the armed groups which have closed the oil ports will be sued and banned from any future cooperation,” Oil Minister Abdelbari Arusi told Reuters.

“There won’t be any market for them in Libya anymore. We are warning all global and small firms against dealing with the armed groups,” he said. “This oil belongs the Libyan people.”
Arusi said the protesters had offered a firm using a Malta-flagged tanker trying to load crude in Es-Sider for around $90 a barrel, around $16 a barrel less than its official selling price set by the state-owned National Oil Corp (NOC).
He dismissed an announcements by the protesters that oil workers had resumed work at the seized Ras Lanuf, Es-Sider and Zueitina ports, which previously accounted for 600,000 bpd.
“They don’t have the money, workers and engineers. All engineers and staff work for firms belonging to National Oil Corp which belongs to the Tripoli government,” he said.

“They are probably forcing our staff to operate the pumping tools but they don’t have any capabilities. The only capabilities they have are weapons but they dont have many.”
The government might give tribal leaders another chance to reach a deal with the pro-autonomy group to end the port blockages but otherwise all options, including the use of force, were on the table. “The government has negotiated and might resort to any means including force,” he said. “God willing the government or defence ministry will do its job.” “The Libyan people are dying because of a lack of financing. We need financing to treat sick people, we need it to buy food abroad, overhaul schools, hospitals and to build roads.” “If there is no oil then the Libyan people will die.”

He said the OPEC member was producing around 650,000 barrels a day of oil, of which 510,000 bpd was being exported. The rest is used to feed the Zawiya refinery, now back to full capacity of 120,000 bpd, and the 20,000 bpd-Tobruk refinery. Production has surged in the past few days after the government managed to convince tribesmen to end a strike at the southern El Sharara field, feeding Zawiya refinery and a nearby port. The field now pumps around 300,000 bpd, he said. He said the southern Wafa field was producing the normal level of 30,000 bpd of condensates after protesters had ended a brief blockage of an oil pipeline running to the western Mellitah port, cooperated by NOC and Italy’s ENI. Output is still roughly half of the 1.4 million bpd measured in July before strikes at ports and fields started.

Arusi said there was no sign of progress in reopening the Hariga port in Tobruk in the far east which has been also seized by armed tribesmen. “Unfortunately it’s still closed,” he said. “We’re waiting for good news in the coming days, God willing.” Western powers worry Libya will slide into instability as Prime Minister Ali Zeidan struggles to reign in militias who helped topple Muammar Gaddafi in 2011 but kept their guns to occupy at will ministries or oil facilities to make demands. The protesters are a mix of militias, tribesmen or members of minorities which are not united and have a long list of different demands hard to meet for a weak government.

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