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UPDATE 3-Libya's oil exports down to trickle as unrest picks up

Julia Payne and Ulf Laessing
Monday, 28 Oct 2013 | 1:25 PM ET

* Exports halted from major western Zawiya, Mellitah ports

* El Sharara field's output halted since Saturday-NOC source

* Exports from eastern Brega port seen still down

* Only offshore Bouri and Al Jurf oil platforms operating

(Adds details on Mellitah suspension, background, PM comments)

LONDON/TRIPOLI, Oct 28 (Reuters) - Libya's oil exports have dropped to less than 10 percent of capacity as protests have halted operations at western ports and fields, frustrating government efforts to end a three-month stranglehold on the industry.

The OPEC producer's crude oil exports have fallen to around 90,000 barrels per day, according to Reuters calculations, as Libyan and market sources said crude exports from the Zawiya and Mellitah oil terminals had been suspended.

The government had been relying on relatively stable revenue from its western ports in recent weeks, while it has struggled to reach a deal with protesters blocking its big eastern facilities, with some demanding a greater share of the oil wealth.

Libya had brought exports back to around 450,000 bpd over the last month, although that level was still far short of its pre-war export capacity of around 1.25 million bpd.

But the new shutdowns, which began over the weekend, have extended the worst disruption in Libya's oil industry since the 2011 civil war.

Only the offshore platforms, Bouri and Al Jurf, remained operational.

"The latest protests look to be by the same groups with which the government has previously tried to make concessions, so that suggests either the promises have not materialised or the groups are now pushing for more," Richard Mallinson, North Africa and Middle East analyst at Energy Aspects consultancy, said.

"Meanwhile, the guards who control the main central/eastern terminals do not show any signs of backing down."

ISOLATED IN TRIPOLI

Prime Minister Ali Zeidan said on Monday, however, that exports from the eastern port of Haragi would resume within a week and that the government was seeking to meet the demands of protestors there. The port has a capacity of 110,000 bpd.

Oil is the main source of revenue for the North African country, which is losing some $130 million a day in income, Zeidan said last month.

The government in Tripoli has become increasingly isolated since early summer and has only limited resources to control disruptions outside the capital, as indicated by the fact that Zeidan was briefly kidnapped last month.

He has repeatedly appealed to foreign nations for help in training Libya's weak army and to collect weapons from militia groups, who have refused to give up arms following the civil war, but government actions have been limited.

Brent crude oil prices were up by $2.03 at $108.96 a barrel at 1715 GMT, while U.S. crude oil prices as up by only 57 cents at $98.42.

"The key driver today for Brent is Libya," said Amrita Sent, chief analyst at consultants Energy Aspects in London.

Zawiya's oil exports were suspended after the El Sharara field that feeds the port was shut down. Zawiya had been exporting around 200,000 bpd on average in October, according to shipping data.

Residents in the local area on Saturday entered facilities at the 330,000 bpd oilfield to demonstrate. The field also provides crude for a 120,000 bpd refinery, a National Oil Corp (NOC) official said on Monday.

Oil exports at the Mellitah terminal, owned by NOC and Italy's Eni, have been suspended due to a protest by the Amazigh group, or Berber tribesmen, demanding more political rights, sources at the terminal operator and oil traders said.

The protest began on Sunday and turned into a stand-off on Monday with other local residents who wanted to keep the port in operation to ensure that gas and fuel supplies arrive to support the strained power grid, Libyan port sources said.

The 130,000 bpd El Feel field, which feeds the port, was still operational, trading and local sources said.

Loadings at the eastern Brega terminal were still suspended after power problems forced most of the output to be shut over a week ago, shipping and trading sources said.

"Brega production is very low, so no exports," one of the sources said.

(Additional reporting by Ghaith Shennib in Tripoli, Editing by Jason Neely and Jane Baird)