As Violence Rises, Libya Oil Output Threatened

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Libya, the OPEC member that is Africa's third-largest oil producer, has already seen its oil output plunge due to violence in the country and could see that production almost entirely wiped out as allied forces started bombing Libyan military targets on Saturday.

Shokri Ghanem, chairman of the country's state-run National Oil Corp., said on Saturday that Libya's oil output has now fallen to less than 400,000 barrels a day. The country, which is home to Africa's largest oil reserves, pumped almost 1.4 million barrels a day in February and almost 1.6 million barrels a day in January.

Western oil majors such as Eni SpA (E), Italy's largest oil company and the Western firm with the largest footprint in India, and BP (BP), Europe's second-largest oil company, have either significantly reduced operations in Libya or halted their business in the country altogether.

Ghanem said Libya does not want to break its existing contracts with companies that had been doing business in the country, but may be forced to award new oil and gas concessions directly to companies in countries such as China, India and Brazil in order to raise production, according to Bloomberg News.

OPEC members Angola and Nigeria are Africa's top two oil producers.