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Libya oil chief: Production down 50 percent

    CAIRO (AP) -- Libya's oil chief says production is down 50 percent because of the exodus of foreign oil workers fleeing the country's violent uprising against leader Moammar Gadhafi.
    But Shukri Ghanem, the head of the National Oil Co., told The Associated Press on Monday that all of Libya's oil installations are protected and safe, and disputed comments by the European Union's energy commissioner who said the major fields had been wrested from Gadhafi's hands.
    Ghanem said that all the refineries, installations and oil fields are "safe and protected." He said that tankers are loading at the port in Brega as well as other ports.
    Ghanem said it was safe for foreign workers to return.
    International companies have been evacuating their foreign staff because of the violence.
    THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
    CAIRO (AP) -- Libya's eastern port of Tobruk reopened Monday and one tanker bound for China was being loaded, officials said, while the European Union noted that many of the country's oil and gas fields had been wrestled from leader Moammar Gadhafi's hands.
    The news came as the chief executive of Saudi Arabia's state-run oil giant announced his company had stepped in to compensate for an export shortfall stemming from the unrest in the North African nation, and the kingdom's information minister reaffirmed his country's policy of ensuring stability in oil markets.
    In tandem, the news offered a glimmer of hope that the export disruption from Libya may ease, at least slightly, even if market fears had yet to dissipate. Libya, whose exports mainly head to Europe, is the only member of the Organization of the Petroleum Exporting Countries so far seriously affected by the protests roiling the Arab world, and unrest there has sent shudders through global oil markets.
    Concerns are centered on the possibility that the unrest could spread to other OPEC members, triggering a major supply crunch that would propel prices forward and potentially undercut global economic recovery efforts.
    "The terminal (at Tobruk) is working at 100 percent," Rajab Sahnoun, an official with the Arabian Gulf Oil Co., which is based in the eastern city of Benghazi, told The Associated Press. He said that one tanker bound for China was being loaded at the Marsa al-Harigh (Tobruk) port, with a capacity of 1 million barrels of crude, while another Italy-bound tanker was waiting and expected to load in coming days.
    Sahnoun also said that at least two of the major eastern fields, Sarir and Misla, were still producing, though at slightly reduced capacity. He was not able to say how much production was down at those fields, but noted that the 34-inch pipeline to the terminal was operating normally. The terminal can store 4 million barrels of crude, he said.
    Another Agoco official, Ali Faraj, who works in the emergency operations room at the facility, said the company's production of roughly 220,000 barrels per day was largely unaffected.
    "A drop of 5,000 or 6,000 barrels per day, in our experience, is not a drop, really," Faraj said.
    Gamal Shallouf, spokesman for the Tobruk city council, said that along with Sarir and Misla, the Nafoura field was also producing.
    Libya produces about 1.6 million barrels per day of crude oil, and about 85 percent of its exports are Europe-bound.
    There were conflicting reports about the overall decline in Libya's output.
    The National Oil Company said production was down about 50 percent, according to Libyans working in the industry. The figure is roughly the same as estimates put forward by analysts and international oil company officials.
    But Faraj and others dismissed reports of such a steep drop as propaganda designed to boost support for Gadhafi by showing how the unrest had hit the country.
    With communications down or difficult in many parts of the country and large areas of the country inaccessible because the danger posed by pro-Gadhafi militias, it has been difficult for executives and others to get a clear picture.
    The European Union's energy commissioner, Guenther Oettinger, said Monday that control over much of the oil and gas fields is in the hands of regional families or provisional regional leaders that have emerged from the revolt and chaos.
    "They have taken over control, they have taken away control from Gadhafi," Oettinger said during a meeting of EU energy ministers. He also spoke out against a proposal put forward by Germany's foreign minister that the EU should consider a total ban on payments to Libya including for oil deliveries.
    Oettinger argued that since Gadhafi already lost much of the control over the oil and gas fields, imposing a ban on oil imports would be bad.
    "We'd be punishing the wrong people potentially and we would be discarding the regional aspects if we just stopped imports altogether. We might actually be punishing people who have changed their ways, who are acting better."
    Saudi Arabia and other OPEC members have repeatedly said they are ready to step in and compensate for any Libyan export losses. The fighting in the country has already hammered oil markets, with the U.S. benchmark hovering above $98 per barrel on Monday while the Brent futures contract in London was above $113 per barrel.
    Khalid Al Falih, the chief executive of Saudi Aramco, said that the company had "met the additional needs resulting from the halt in Libyan exports." He did not specify how much additional crude the company had supplied its customers, saying that the situation "is continuously changing." Saudi Arabia's information minister also said the kingdom remains committed to ensuring stability of supply and reducing volatility in the market.
    OPEC members have dismissed the need for an emergency meeting, even as consumer countries voiced alarm at the rally in prices.
    Iran, which holds OPEC's revolving presidency this year, appeared to take issue with the Saudi efforts, with its oil minister, Masoud Mirkazemi, calling on Riyadh to "avoid any hasty decisions" regarding its crude oil output, the official IRNA news agency reported.
    Libya's ongoing political struggle has hit hard at the country's vital oil sector.
    The country sits atop Africa's largest proven reserves of crude. But it also relies of foreign companies for their expertise as it has tried to boost its production.
    Many of those companies, which include international giants such as Exxon Mobil, BP PLC, Spain's Repsol, Italy's Eni SpA and Austria's OMV, however, pulled their foreign workers as the violence flared.
    Eni, which before the crisis produced 244,000 barrels of gas and oil equivalent a day in Libya, about a quarter of the country's exports, said it was continuing to evacuate its employees.
    The company last week announced that supplies of natural gas from Libya, through the Greenstream pipeline, had been suspended. But Eni said it was able to meet its customers' demand for gas. Up until the crisis, Libya supplied around 10 percent of Italy's gas.
    Oil workers for Britain's OPS International oil field services company made it across the Egyptian border in a convoy of buses across the desert late Sunday night, and another bus full of oil workers reached the Libyan port of Ras Lanuf Monday and got on a ship Monday bound for Malta, said company chairman Gavin de Salis.
    Meanwhile, France's Total SA said it evacuated all expatriate oil workers in the country, and their families, said spokeswoman Phenelope Semavoine. She said the company "continues to reduce some of our production" of Libya oil but declined to provide more detail.
    Repsol spokesman Kristian Rix said Monday that the company is now "declining to give production figures because the situation is unclear and communications are difficult." He said the company was able to get the rest of its employees and contractors out of remote Libyan desert production areas over the weekend. In all, about 200 employees have been evacuated since the crisis began.
    BP confirmed it has evacuated all 41 expat staff and their dependents. It has 100 local staff remaining in Tripoli.
    The company had won a $900 million offshore Libya oil contract that sparked controversy amid speculation the deal was linked to the compassionate release from a Scottish prison of the sole person convicted in the 1988 Lockerbie bombing. BP was in the preparatory stages of drilling in Libya and, as a result, had no production.
    Associated Press writers Paul Schemm in Brega, Libya, Raf Casert in Brussels, Alan Clendenning in Madrid, Angela Charlton in Paris and Jane Wardell in London contributed to this report.

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Libya oil chief: Production down 50 percent


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