BP suspends exploration as Libya unrest worsens

By Brian Swint

Feb. 21 (Bloomberg) — BP Plc suspended exploration work in the Libyan desert as shares of Eni SpA dropped on concern that worsening violence in the North African country will disrupt oil and gas production.

BP, which has no producing assets in the country, is evacuating families and non-essential staff, spokesman David Nicholas said today. Eni, the largest foreign producer in Libya, fell as much as 4.1 percent, the most since May.

Saif al-Islam Qaddafi called on protesters against his father Muammar Qaddafi’s 41-year rule to engage in dialogue or face a civil war that risks the country’s oil wealth, warning that “rivers of blood will flow” if demonstrations continue. Libya holds the largest crude oil reserves in Africa. Brent crude oil rose to $104.60 a barrel, the highest since 2008.

“The violence is unsettling and it’s definitely right to be cautious,” said Jason Kenney, head of oil and gas research at ING Wholesale Banking in Edinburgh. “It seems like Eni is most at risk. The gas coming into Europe is quite significant, so it’s a concern.”

Shokri Ghanem, chairman of Libya’s National Oil Corp., said he had no information about a disruption in production of crude. Al Jazeera reported earlier that Libya’s Nafoora oil field had stopped producing because of an employee strike.

Pipeline to Italy

Eni, which produced 244,000 barrels of oil equivalent a day in Libya in 2009, said operations in the country were proceeding as usual. Shares were down 3.9 percent in Milan trading at 11:07 a.m. local time. The company also operates the Greenstream gas pipeline from Libya to Italy through the Mediterranean Sea.

OMV AG, Austria’s largest oil company, is withdrawing all non-essential staff from Libya. Shared dropped as much as 4 percent and traded down 2.7 percent as of 10:48 a.m. in Vienna. OMV produced 34,000 barrels a day in Libya in the first nine months of 2010, making this OMV’s third-biggest production country after Romania and Austria.

Libya has become the focal point of regional protests ignited by the ouster of Tunisia’s president last month and energized by the fall of Egypt’s President Hosni Mubarak on Feb. 11. Violence has flared in Yemen, Djibouti and Bahrain as governments cracked down on calls for reform.

Thousands of people demonstrated yesterday in Benghazi, Libya’s second-largest city. They were met by gunfire from forces loyal to the 68-year-old Qaddafi, Human Rights Watch said, citing reports from witnesses.

Tripoli Offices

Statoil ASA, the Norwegian energy producer, has closed its offices in Tripoli, Libya, spokesman Baard Glad Pedersen said by telephone today. Statoil participates in land-based oil production and exploration activities in the Mabruk field, operated by Total SA, and in the Murzuk basin, operated by Repsol YPF SA.

Repsol traded down 1.7 percent as of 10:51 a.m. in Madrid. BP was little changed in London.

Royal Dutch Shell Plc said it has temporarily evacuated the families of expat workers in Libya. “We continue to monitor the situation in the country very closely,” said Kirsten Smart, a spokeswoman for Shell, by e-mail.

15 Comments

  1. 2tor

    Time to gas up the bike, here comes 5 dollars a gallon.

    #1
  2. richeyrich

    Maybe now we can rely on our own oil instead of these foreign countries and no longer be at their mercy.

    #2
  3. bob

    Obama needs to put his top CZAR on this Cap Sunstein the noted Communist professor of law that he appointed – he will fix it.

    #3
  4. Anarchitex

    How do we get BP out of Texas?

    #4
  5. YellowRose

    Nothing like world unrest to make us appreciate what we have here. But, then again, how long will it be before we see it here?

    #5
  6. YellowRose

    Funny how all of these country’s major religion is that well known religion of peace.

    #6
  7. Art Vandeley

    Hmmmm maybe “Drill Here, Drill Now” or “Drill Baby Drill” will finally sink in when the progressive democrats are forced to pay $8.00/gallon to fill up their luxury SUVs.

    #7
  8. Sprocket1962

    Nice Point, Art but I don’t think your sound logic will sink in. I suspect Barry’s got a call into AlGore and Green Energy is right around the corner.

    #8
  9. Democrat Treehugger

    It would have been smarter if we had drilled here in America, but nobody has ever accused me of being smart.

    #9
  10. Joe

    This is gonna spread like wildfire pretty soon, and affect all the countries over there. We’re gonna have an oil war. Good timing on draining the strategic reserve, washington :(

    Wanna see oil go up to 200 a bbl? Send Jimmy Carter over there.

    #10
  11. As a progressive democrat, you’d be very, very surprised by how many of us know that more drilling has to happen here. I don’t judge every conservative as if they are a Tea Bagger, I’d appreciate it if you didn’t judge every democrat as if they’re an illogical nut.

    #11
  12. theallknowningone

    I can hear Aaron Tippin now………… Drill here, Drill now!

    That’s the redneck answer to our oil problems.

    #12
  13. harr1234

    Running away from a falling corrupted government ay. Cannot do business with a legit government ay. I hope the people take over your drilling rigs and make you pay what you should be paying you corrupted oil and natural gas companies. You only exist in corrupted countries. God help you if all of countries in the middle east wake up and have a decent government for the people by the people. Maybe then you will wake up and quit being so selfish and greedy and treat these people with respect and pay them what they are worth not what you think they are worth.

    #13
  14. mark

    I’ll bet BP and the EU are just happy as punch now they invested billions of dollars in Libya and negotiated freeing the terrorist that bombed the airliner over Scotland that killed over one hundred Americans. He returned to Libya to a hero’s welcome complete with parades. Supposedly he was released because he had only three months to live because of cancer. Turns out he didn’t have cancer at all.. Serves them right the scumbags.

    #14
  15. Helen

    Sure, let’s go ahead and drill here and use up all our oil and gas. Then where will we be? Why do you think we import as much as we do? Try to think ahead a little bit. There is no green energy that is cost effective in any way, and there is no battery-operated or sun-powered or any other kind of car that will replace gasoline engines anytime soon. Of course, drill here means all over Texas, Louisiana, Alabama and Mississippi, but heaven forbid any of the loonies in California or the Northeast would have to suffer the sight of a drilling rig. Yet they are the ones yelling the loudest when their prices go up. It’s a case of you’re damned if you do and damned if you don’t. Try walking — that’s the only thing you are in control of!

    #15