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BP, Total writing off oil assets in Libya


Libya has become a major headache for European oil companies as a four-year conflict forced BP to join Total in writing off millions of dollars in investments in the North African country.

BP on Tuesday said it had taken an impairment of almost $600 million in the second quarter as fighting forced it to suspend an oil exploration campaign. The unexpected charge was the main reason BP’s earnings fell short of analysts’ estimates.

“There is significant uncertainty on when drilling operations might be able to proceed,” London-based BP said in a statement.

The charge comes three months after Total became the first European oil major to take an impairment in Libya, writing off $755 million from onshore assets. That’s an ominous sign for firms including Eni SpA and Repsol SA, which have yet to mark down the value of their assets in the country.

The Libyan oil industry has been in chaos since the 2011 rebellion that ended Moammar Gadhafi’s 42-year rule. Militias backed by rival governments in Tripoli, the capital, and Benghazi, the main city of eastern Libya, have this year attacked oil fields and terminals that were largely spared during the initial phase of the uprising.

Es Sider and Ras Lanuf, the nation’s largest and third- largest oil export ports, have been shut down since December following attacks. In February, gunmen stormed and briefly captured the Al-Mabruk field operated by Total.

Eni, which reports first-quarter results on Thursday, has sustained output in Libya despite growing insecurity. Like the Italian company, Madrid-based Repsol hasn’t written down its assets in the country, although it has suffered from intermittent production outages.

BP returned to Libya in 2007 after a more than 30-year hiatus, signing a deal with the country’s state-owned oil company to spend $900 million searching for oil and gas in a portion of the country the size of Belgium. The deal was part of the international rehabilitation of Libya after the Qaddafi regime gave up its program of weapons of mass destruction and paid compensation to the victims of terror attacks.

Libya is producing less than 400,000 barrels a day as the conflict that has divided the North African country cuts electricity supply to oil fields and prevents maintenance. Before the revolution, Libya pumped about 1.6 million barrels a day.


8 Comments on "BP, Total writing off oil assets in Libya"

  1. Plantagenet on Tue, 28th Jul 2015 8:28 pm 

    Obama’s 2011 military intervention in Libya has produced nothing but chaos, and resulted in more power for ISIS and the other Islamic militias.

    Sadly, the same thing seems to be happening again since his 2014 military interventions in Syria and Iraq.

  2. davey thompsony on Tue, 28th Jul 2015 9:04 pm 

    Just goes to show ya planty your favorite President ever is their look’in out for ya, just say’in.

  3. Jimmy on Tue, 28th Jul 2015 9:35 pm 

    Plant should change his name to ‘scratched record’.

  4. Dredd on Wed, 29th Jul 2015 9:06 am 

    A wave of the future from the fog of the past (In the Fog of The Presstitutes – 4).

  5. BobInget on Wed, 29th Jul 2015 9:39 am 

    Bullish EIA Wednesday Inventory and Consumption report:

    Summary of Weekly Petroleum Data for the Week Ending July 24, 2015
    U.S. crude oil refinery inputs averaged about 16.8 million barrels per day during the
    week ending July 24, 2015, 108,000 barrels per day less than the previous week’s
    average. Refineries operated at 95.1% of their operable capacity last week. Gasoline
    production decreased last week, averaging 9.7 million barrels per day. Distillate fuel
    production increased last week, averaging 5.1 million barrels per day.

    U.S. crude oil imports averaged over 7.5 million barrels per day last week, down by
    396,000 barrels per day from the previous week. Over the last four weeks, crude oil
    imports averaged over 7.5 million barrels per day, 1.0% above the same four-week period
    last year. Total motor gasoline imports (including both finished gasoline and gasoline
    blending components) last week averaged 613,000 barrels per day. Distillate fuel imports
    averaged 130,000 barrels per day last week.
    U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum
    Reserve) DECREASED by 4.2 million barrels from the previous week. At 459.7 million
    barrels, U.S. crude oil inventories remain near levels not seen for this time of year in at
    least the last 80 years.

    Total motor gasoline inventories decreased by 0.4 million barrels
    last week, but are in the middle of the average range. Finished gasoline inventories
    increased while blending components inventories decreased last week.
    Distillate fuel
    inventories increased by 2.6 million barrels last week and are in the middle of the average
    range for this time of year. Propane/propylene inventories rose 1.8 million barrels last
    week and are well above the upper limit of the average range. Total commercial
    petroleum inventories increased by 0.1 million barrels last week.

    Total products supplied over the last four-week period averaged 20.1 million barrels per
    day, up by 3.8% from the same period last year. Over the last four weeks, motor gasoline
    product supplied averaged over 9.5 million barrels per day, up by 6.2% from the same
    period last year. Distillate fuel product supplied averaged over 3.7 million barrels per day
    over the last four weeks, down by 3.6% from the same period last year. Jet fuel product
    supplied is down 3.1% compared to the same four-week period last year

  6. BobInget on Wed, 29th Jul 2015 9:51 am 

    HIGHLIGHTS as seen by old guy who invests.

    95% of refineries producing.
    Probable gasoline shortages, certain regions, coming weeks.

    Imports higher then last year DESPITE greater domestic production. This is a clear confirmation of OVER 20 million (20.1) barrels noted in final paragraph.

    The so called 80 year record storage is all about
    speculative, not paper barrels being held for future profits.

    Anyone who continues to shout “glut” needs to
    explain why 7.5 million barrels p/d imports are insufficient for need. (we were down 2.6 million B’s)

  7. idontknowmyself on Wed, 29th Jul 2015 10:10 am 

    I wonder if this 80 year record storage oil is not mainly oil sand and shale oil that refiners don’t want to buy because they cannot refine it.

    I would really like to see the chemical composition of this oil in storage, if there is any oil storage.

  8. BobInget on Wed, 29th Jul 2015 11:31 am 

    Storage is real. SPR is real. No one is stipulating
    the specific gravity. While refineries today can handle anything, i’ll be most is lesser value heavy crude. It’s verbiage that bugs me.
    Eighty years, indeed. Some comparison!
    In 1935, how many cars were on the road?
    How many storage tanks were in Oklahoma in the first place? During the Great Depression how much was a gallon of gasoline? A gallon of milk?
    A loaf of bread? An entire three bedroom one bath house? One night at a Motel?

    In the interest of holding oil prices in check EIA resorting to such invidious comparisons is embarrassing.

    What isn’t making headlines? One hundred thousand barrels per day increase in consumption every week for the last three.
    Auto milage traveled:


    “Travel on all roads and streets changed by 2.7% (7.3 billion vehicle miles) for May 2015 as compared with May 2014.” The less volatile 12-month moving average is up 0.19% month-over-month and 2.84% year-over-year. If we factor in population growth, the 12-month MA of the civilian population-adjusted data (age 16-and-over) is a smaller change, up 0.11% month-over-month and up only 1.68% year-over-year”.

    “Only” 1.6% growth rate” accounts for that extra 100,000 B’s p/d or 700,000 B’s per week.

    If 95% of all America’s refineries are functional,
    a single GOM hurricane will cause nation wide shortages. IOW’s we are on a ‘just in time’ supply line.

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