Libyan chaos stirs global panic over oil supplies

Anti-Libyan leader Moammar Gadhafi gunmen celebrate the freedom of the Libyan city of Benghazi, Libya on Sunday February 27. US President Barack Obama has called on Libyan dictator Moammar Gadhafi to leave power immediately, saying he has lost the legitimacy to rule with his violent crackdown on his own people. (AP Photo)
MADRID, February 27 (AP): Libya's oil industry is in chaos, and that's no exaggeration. Armed men loot equipment from oil field installations. British commandos execute secret raids in the Libyan desert to rescue stranded oil workers as security disintegrates rapidly in remote camps.
Libyan port workers, frightened of being caught up in Moammar Gadhafi's violent crackdown on protesters, fail to show up for work, leaving empty tankers floating around the Mediterranean Sea waiting to load crude.  And the European oil companies extracting Libya's black gold are operating in crisis mode, trying to get stranded expatriate workers out and safe amid conflicting information on how much oil is still being pumped and just where it all is.  That was just this week. The situation may not get better in the near future.
No one knows whether Gadhafi or the rebels trying to oust him will end up controlling Africa's biggest oil reserves. Fears abound that Libya could turn into a fractured nation with competing armed groups ruling over rich and remote desert fields lying hundreds of miles (kilometers) apart from each other.
The chaos in Libya as it descends into virtual civil war has sent international oil prices skyrocketing despite a pledge from Saudi Arabia, the world's largest oil exporter, to ramp up exports. And that volatility is likely to continue, because it could take weeks or even months for Libyan production and exports to return to normal levels, experts said.
That has sent already over-caffinated oil traders into a frenzy that won't calm down until there's more clarity about what is happening on the ground in Libya.  The International Energy Agency reported late Friday that Libya is probably still producing about 850,000 barrels of oil daily, down from its normal capacity of 1.6 million barrels - but acknowledged the estimate is based on "incomplete, conflicting information."
Libya produces just under 2 percent of the world's oil, but its customers are overwhelmingly European. Hardest hit by the sudden oil shortage are European refiners that receive 85 percent of Libya's exports, turning the country's highly valued crude into diesel and jet fuel.
The biggest buyers are Italy, France, Germany and Spain - and Spain is so concerned it announced Friday that highway speed limits will be reduced in March in a desperate bid to cut fuel consumption.  The biggest problem facing oil companies and European consumers who depend on Libyan oil is a near-complete breakdown in solid information. Phones in Libya rarely work, Internet is intermittent, workers are fleeing and looters are grabbing what they can or pose a threat until order is restored.
While British military planes staged a daring desert rescue Saturday of 150 oil workers, hundreds of other workers were heading across the Sahara Desert in bus convoys toward the Egyptian border - a grueling trip.
One evacuee said the military plane he boarded in Libya was supposed to carry around 65 people, but quickly grew to double that.
"It was very cramped but we were just glad to be out of there," Patrick Eyles, a 43-year-old Briton, said at Malta International Airport.  Spain's Repsol-YPF oil company announced Tuesday it had suspended operations in Libya, only to find out a day later that the oil fields it operates with other firms were still producing 160,000 barrels of crude daily. Still, that was less than half of the 360,000 barrels produced before the crisis began.
Despite reports that production was still under way in the vast Saharan desert Amal fields, Libyans never before permitted to approach the oil fields under Gadhafi's reign showed up armed and took anything they could - four-wheel drive vehicles, pumps, generators. One group came with a trailer and tried to remove a huge crane, said Gavin de Salis, chairman of Britain's OPS international oil field services company.
"Nobody shot anyone," De Salis. "But people were wandering around with guns saying 'Thanks, we'll take your vehicle since you're leaving anyway."'
Two buses arranged by De Salis' company were ferrying 117 expatriate workers toward Egypt on Sunday, a trip expected to last 24 hours or more, and he said another bus was expected to take 25 expatriates out.  Even though production appears to be limping along - with Repsol reporting that Libyan oil workers are increasingly running operations as expatriates leave - the oil isn't getting out. The 320-mile (520-kilometer) natural gas pipeline under the Mediterranean from Libya to the Italian island of Sicily has been shut down for a week, with no guidance from its owner, the Italian energy firm Eni SpA, on when it might start pumping again.
"Most Libyan ports are closed due to bad weather, staff shortages, or production outages," the IEA reported. Ports are key because Libya's crude heads abroad on tankers.  Major container ship companies have suspended deliveries or pickups from Libyan ports with no word on when shipments might resume. Tanker ships that deliver to Europe have been told to stay more than 100 miles (160 kilometers) offshore from some Libyan ports and await information on whether they can safely dock and take on oil.
The massive oil terminal at Brega, Libya's second-largest hydrocarbon complex, was nearly deserted over the weekend, with operations scaled back almost 90 percent because employees had fled and ships were not showing up. The Brega complex, about 125 miles (200 kilometers) west of the rebel stronghold of Benghazi, collects crude oil and gas from Libya's fields in the southeast and prepares it for export. Since the crisis began Feb. 15, however, General Manager Fathi Eissa said production had dropped from 90,000 barrels of crude a day to 11,000.
Anti-corruption protests in southern Egypt

ASSIUT, February 27 (AP):
Witnesses say villagers in southern Egypt have blocked a highway with burning tires and set fire to three government buildings to protest official corruption.  Also in Assiut province, some 2,000 civil servants went on strike Sunday for better living conditions, saying senior officials are distributing social benefits unfairly.
Anger over corruption helped drive the uprising that toppled Egypt's president, Hosni Mubarak, on Feb. 11. On Saturday, a panel appointed by Egypt's military recommended constitutional reforms that appeared to meet key demands of pro-democracy activists.  In Sunday's unrest, protesters blocked the Assiut-Cairo highway for five hours and residents of the village of Bani Udai set fire to three local government buildings.

Protesters clash with police in Oman

DUBAI, February 27 (AP):
A police official says at least one person has been killed in clashes between security forces and hundreds of protesters demanding political reforms in the strategic Gulf country of Oman.  Witnesses say police fired tear gas and rubber bullets at protesters Sunday in Sohar, about 120 miles (200 kilometers) northwest of the capital Muscat.  The police official says at least one person was killed in the clashes. He spoke on condition of anonymity because he is not authorized to brief the media.