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Follow on Google News | TW-International: No swift return to oil production for Libya post Gaddafi – Barclays.Barclays says they do not expect swift resumption of Libyan oil production even if the rebels take over complete control of the country.
By: TW-International “Thus, the resumption of about 250-500 thousand b/d of production, on the assumption that Gaddafi actually falls, seems possible by year-end and into Q1 12, but extrapolating Gaddafi’s departure to the restoration of full output volume of 1.6 mb/d from Libya would be a mistake, in our view.” Barclays informed TW-International. Besides the security issues, damage to infrastructure has been reported following numerous attacks by government forces, and there is not much clarity regarding how much damage the oil fields or infrastructure have sustained. It is felt that the departure of Gaddafi will not necessarily signal the end of Libya’s problems but that this could be the beginning of some long-lived difficulties. “…the prospects for Libyan oil exports this year are not very good, in our view. There are very few functioning institutions that can immediately step in and run the country in Gaddafi’s absence. There is no parliament, no constitution, and virtually no civil organizations.” Libya’s military is full of tribal and regional divisions and this may prove a major obstacle in establishing a post-Gaddafi government. Added to this, the rebels remain somewhat of a mystery themselves. The Transitional National Council includes several former members of the Gaddafi government, including the former interior minister, raising concerns that it may not mark an entirely clean break with the old order or fully represent the will of the Libyan people. “Nonetheless, we expect the oil market to likely function on the basis of selling the headline before buying the later reality at more leisure: a sudden wave of market bearishness in the expectation of a swift return of production.” # # # TW-International is a leading independent investment company, based in the heart of Hong Kong. TW-International offers a variety of investment products for institutional, corporate and high net worth investors in equity debt and FX markets. End
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