Country Report Libya April 2011

Economic performance: East seeks to sell oil

According to the International Energy Agency, oil exports from Libya, which amounted to just under 1.3m barrels/day (b/d) in 2010, had "ground to a halt" by mid-March. The problem was partly a result of lower production, but legal restrictions on the sale of oil played just as significant a part. Initially sanctions made buying Libyan oil illegal, but on March 28th the US announced that it would allow oil sales from rebel-held areas provided that separate payments systems were put in place to ensure that none of the cash from any sales went to the NOC, the Central Bank of Libya, or any other government entity. AGOCO, the main producer in the east, remains on OFAC's list of sanctioned bodies, however. In late March the opposition said that it was producing up to 130,000 b/d of oil and could increase this to 300,000 b/d. In the west, oil supplies are running out as the regime has run down its stocks and the Azzawiya refinery has reportedly shut down. In an interview published by The Wall Street Journal on April 5th, Shokri Ghanem, the chairman of the NOC, said that Libya was producing between 250,000 b/d and 350,000 b/d of oil, down from previous levels of 1.6m b/d. The Qadhafi regime has warned that it will sue any company that strikes an oil deal with the rebels.

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