Libya has become a major headache for European oil companies as a four-year conflict forced BP to join Total in writing off millions of dollars in investments in the North African country.
BP on Tuesday said it had taken an impairment of almost $600 million in the second quarter as fighting forced it to suspend an oil exploration campaign. The unexpected charge was the main reason BP’s earnings fell short of analysts’ estimates.
“There is significant uncertainty on when drilling operations might be able to proceed,” London-based BP said in a statement.
The charge comes three months after Total became the first European oil major to take an impairment in Libya, writing off $755 million from onshore assets. That’s an ominous sign for firms including Eni SpA and Repsol SA, which have yet to mark down the value of their assets in the country.
The Libyan oil industry has been in chaos since the 2011 rebellion that ended Moammar Gadhafi’s 42-year rule. Militias backed by rival governments in Tripoli, the capital, and Benghazi, the main city of eastern Libya, have this year attacked oil fields and terminals that were largely spared during the initial phase of the uprising.
Es Sider and Ras Lanuf, the nation’s largest and third- largest oil export ports, have been shut down since December following attacks. In February, gunmen stormed and briefly captured the Al-Mabruk field operated by Total.
Source: The Salt Lake Tribune