How soon can Libya get its oil to flow?
An undated picture, taken before the fall of Moammar Gadhafi's regime, shows a general view of an oil and gas field in Tripoli.
October 26th, 2011
08:57 PM ET

How soon can Libya get its oil to flow?

With former Libyan leader Moammar Gadhafi ousted and dead, Libya’s interim government seems confident the country can reach pre-war oil production levels soon. But not everyone is so optimistic.

Before the February uprising, Libya put out about 1.6 million barrels of oil each day. That’s 2% of the world’s daily oil production.

The oil stopped flowing during the civil war as foreign companies left without properly shutting down the oil infrastructure. It is estimated Libya is now producing about 350,000 barrels of oil per day, but Libya’s new leaders are anxious to get more oil flowing.

Some oil companies that operated wells and refineries in Libya before the war “expressed some skepticism regarding a restoration of production to full pre-war levels within the next six months,” according to Fadel Gheit, managing director of oil and gas research at the Oppenheimer & Co. investment bank and firm.

“Obviously, the whole country is in shambles … civil war, total anarchy. Nobody is in control,” Gheit said. “So it’s not, obviously, a situation that will encourage oil companies to hurry back to Libya anytime soon.”

Gheit said because European oil companies left Libya so quickly during the uprising, they didn’t place the drills and refineries in a state that would make them easy to start up again. In some cases, wells will have to be re-drilled.

The new leaders of Libya will have to invest in the dilapidated oil infrastructure to maximize production and increase the nation’s revenue. But their limited funds are also needed to rebuild the country in the wake of intense fighting. If they spend too much on one, they may not be able to get the other done.

Click the audio player to hear the rest of the story from CNN Radio's Steve Kastenbaum:

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  1. Superman

    Chrissy where are you its CNN here, what was our excitement last week???

    April 1, 2012 at 10:29 am | Report abuse |
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