Libya: Could take years for full oil production to resume

23rd August 2011

The Financial Times (paywall) quotes consultants and industry executives who believe the fall of the 41-year-old regime of Muammar Gaddafi could see Libya producing 300,000 barrels a day during the next three months from fields in the east, which have been under rebel control since the start of the civil war, and the remote south-west desert.

"I'm sceptical that Libya will return to its pre-war output until 2013 or well beyond," says Ben Cahill, an expert on Libya at oil consultants PFC Energy in Washington.

The Guardian reports that "as rebel commanders laid claim to 80% of the capital Tripoli – and Muammar Gaddafi's 41-year rule came ever closer to ending – Brent crude fell by as much as $3.47 (£2.10), or 3.2%, to $105.15 a barrel before regaining some ground."

The news has continued to boost markets, the FTSE 100 was last trading at 5,155 up 1.17% on yesterday's close.

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2 thoughts on “Libya: Could take years for full oil production to resume”

  1. Anonymous says:

    Hi Simon
    Could not an increase even in M1 be consistent with economic contraction where firms and households access liquidity to repay debt or use it as a substitute for non-investment working capital / collateral in a credit crunch.

    1. Simon Ward says:

      In theory I suppose, but the M1 rise would be temporary in your first case (i.e. it would fall back when the debt was repaid) and your second reason would tend to produce a one-off jump rather than a sustained higher growth rate.

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