Libya Says Ras Lanuf Oil Storage Cut by 40% After Militia Attack

TRIPOLI Libya said an attack on the Ras Lanuf oil terminal cut storage capacity by about 40 percent, underscoring the continued threat from armed groups for whom energy installations remain prized targets.

Damage to two storage tanks at Libya’s third-largest port on Thursday reduced capacity to 550,000 barrels from 950,000 barrels, state-run National Oil Corp. said Monday. Ras Lanuf stopped loading oil for export last week after clashes erupted, taking more barrels off the market just as OPEC debates whether to increase supply.

In the seven years since the ouster of former leader Muammar al-Qaddafi, Libya’s oil installations have been attacked and ports shut down as groups vie for influence. The nation’s crude output is still little more than half the volume it pumped before Qaddafi’s downfall, causing a dearth in foreign-currency reserves and a large fiscal deficit.

The latest assault has taken out two of five crude-storage tanks, NOC said in a statement. One of the affected facilities, which is on fire, is in danger of leaking and spreading the blaze to the remaining three units.

“This incident will result in the loss of hundreds of millions of dollars in construction costs, and billions in lost sales opportunities,” NOC said. “Rebuilding the tanks may take years, especially in current security circumstances.”

The disruption comes less than a week before OPEC nations and its partners hold key meetings in Vienna with other major producers to discuss whether to stick with a pact to restrain oil supply after prices topped $80 a barrel in May.

Source: Bloomberg Business News