Libyan Production Outlook Not Good

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Wood Mackenzie, the Scottish energy consultant, said oil output in war-torn Libya is not likely to return to pre-war levels until three years after fighting ends in the country that was once Africa's third-largest oil producer behind fellow OPEC members Nigeria and Angola. Libya is also believed to be home to the continent's largest reserves.

Libya is currently pumping 100,000 barrels of crude per day, but was producing 1.6 million barrels per day before the onset of political violence there in February. Despite fighting that has now stretched into its seventh month, the Gadhafi regime remains in power.

Lifting sanctions on Libya and the return of international oil companies would also play a role in determining when oil production would regain its momentum, United Press International reported, citing the Wood Mackenzie report.

Eni SpA (E), Italy's largest oil company, was the Western oil major with the largest Libyan footprint. BP (BP), Europe's second-largest oil company, is another European major with a significant presence in Libya.

ConocoPhillips (COP) and Occidental Petroleum (OXY), the third- and fourth-largest U.S. oil companies respectively, and Murphy Oil (MUR) are among the U.S. companies that have seen their output hampered due to lost Libyan production.