Brent crude breaches $105/b as Libyan turmoil deepens

London (Platts)--21Feb2011/703 am EST/1203 GMT

ICE Brent crude futures climbed above $105/barrel Monday as the deepening political unrest in Libya began to affect the country's oil production, up $2.36/b from Friday's close. US light crude futures on NYMEX surged by $3.30/b to $89.50/b.

Prices subsequently dropped back, with April Brent trading at $103.38/b and March WTI at $89.36/b at 1137 GMT, $1.86/b and $3.16/b above Friday's closing levels.

Earlier Monday, al-Jazeera television reported that crude production at Libya's Nafoora oil field had stopped because of a strike by workers, hours after a tribal leader warned that oil exports from the OPEC state would be halted unless Libyan leader Muammar Qadhafi orders an end to the violent suppression of nationwide protests.

The oil field is one of the so-called giant fields in the Sirte Basin, the biggest oil-producing region in the North African country, and is operated by the Arab Gulf Oil Co.

The expansion of the Nafoora oil field is part of the Libya's plan to expand its crude oil output capacity by 270,000 b/d by 2013 although that target was likely to be missed even before the recent troubles.

It was not possible to verify the report independently and current production from the field was not available.

A tribal leader in northwestern Libya late Sunday warned that oil exports from the country, which holds Africa's largest crude oil reserves, would be targeted unless the bloodshed ends. Libya currently exports an estimated 1.3 million b/d of crude oil, mainly to Europe.

BP SUSPENDS DRILLING PLANS

BP has suspended plans to drill for oil and gas at its onshore concession in Libya's western desert after contractors were evacuated from the country due to unrest but is still conducting seismic surveys at its offshore license, a company spokesman said Monday.

"We have two license areas, one deepwater offshore and we are still doing seismic. That has been unaffected," a BP spokesman said.

"We were making preparations to make onshore drilling in the western desert. Some contractors have been evacuated so we have suspended drilling," he said, adding that BP was in the early stages of exploration.

BP has about 140 staff in Libya, mostly in Tripoli, he added.

"In the early part of this week, we plan to take out families and non essential staff," he said.

Several other international oil companies operating in Libya said their operations had not been affected so far by the unrest, which has reportedly left more than 200 protesters dead, but that they were planning to evacuate non-essential staff and their families.

A source at Germany's Wintershall, one of the biggest foreign oil operators in Libya, said upstream operations so far had not been affected by the wave of violence that has swept through the OPEC state but that he expected they would be impacted after the evacuations.

Wintershall has been involved in Libya's energy sector since 1958 and is one of the biggest foreign oil producers in the country. It operates eight onshore fields and has a stake with Total and Libyan state-owned NOC in the offshore al-Jurf oil field.

Norway's Statoil is evacuating non-Libyan staff and has told its Libyan staff not to go to the office in Tripoli, which is closing for the time being.

"We have decided to close down the office under the current circumstances and we have a handful of expats leaving the country," the spokesman said, adding that some had already left and some were in the process of leaving.

"Our main agenda is to take care of the security of our personnel," he said. "We are asking our Libyan staff not to come to the office."

Statoil is a partner in two fields in Libya, operated by Total and Repsol.

A spokesman for Total, which produces 55,000 b/d in Libya, said its operations had not been affected by the turmoil but would not comment further or say whether the company planned to evacuate staff.

Austria's OMV also said there had been no impact on its Libyan operations although it plans to reduce its staff in the country to "business-essential staff" because of the unrest and to withdraw all other OMV expatriates and their families. OMV employs 53 people in Libya, including 15 expatriate workers.

OMV entered the Libyan upstream in 1985, and now has interests in 12 exploration and production licenses in the country. Its current oil production in Libya is 34,000 b/d.

Shell said it had "temporarily relocated the dependents of expatriate staff outside Libya" and that it continued to monitor the situation in the country.

--Margaret McQuaile, margaret_mcquaile@platts.com

--Staff reports, newsdesk@platts.com

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