Libya unrest stops oil drilling, majors remove staff

FRANKFURT/LONDON (Reuters) - Spreading unrest in Libya shut down 6 percent of oil output in Africa's No.3 producer and prompted a host of energy firms to pull out international staff, sending oil prices to above $105 a barrel.

Wintershall, the oil and gas exploration arm of BASF said on Monday it was winding down Libyan oil production of as much as 100,000 barrels per day (bpd). A host of companies, including Royal Dutch Shell , ENI and OMV said they were withdrawing expatriate staff.

The firms acted as dozens were reported killed in Tripoli as anti-government protests reached the capital for the first time and Benghazi, Libya's second city, appeared to have slipped out of control of forces loyal to Muammar Gaddafi.

Brent crude rose above $105 a barrel to 2-1/2 year highs on the unrest in Libya, most of whose oil exports flow to Europe and which pumps about 1.6 million bpd of crude oil, making it Africa's third-largest producer after Nigeria and Angola.

"The market is on edge about the potential for Middle East and North Africa supply disruptions," said Mike Wittner, Head of Commodities Research, Americas, at Societe Generale.

"If you've got reports that actual disruptions are starting to occur, it's going to have a supportive impact. A lot of it is high-quality crude and that is important as well."

Libya's oil is priced against European benchmark Brent crude, which traded as high as $105.08 on Monday, its highest since September 2008.

Oil industry and shipping sources said there was no sign of disruption to export flows from Libyan ports.

Most of Libya's oil production operations are located in the east of the country south of Benghazi.

MOVING OUT STAFF

Wintershall was the only company initially to disclose an impact on oil output, but several other firms said they were stopping other work or pulling staff out of Libya.

Britain's BP , which does not produce oil or gas in Libya but has been readying an onshore rig to start drilling in the west of the country, has suspended operations because of the escalating violence.

"We are looking at evacuating some people from Libya, so those preparations are being suspended but we haven't started drilling and we are years away from any production," a BP spokesman said, adding BP has about 40 staff in the country.

Shell, whose operations in Libya are also limited to exploration, has temporarily relocated the dependents of expatriate staff outside the country, a spokesman said, declining to comment further on operations.

Austrian oil and gas group OMV said none of its operations in Libya have been affected but that it was withdrawing expatriate staff.

Norways's Statoil , which participates in land-based oil production and exploration activities in the Mabruk field and in the Murzuk basin with Spain's Repsol , has closed its office in Tripoli and "a handful" of its foreign workers are leaving the country, a Statoil spokesman said.

Oil production from the isolated Murzuq oil field in the desert in the south of the country continues as normal, a spokesman for Repsol said on Monday.

French oil major Total told Reuters its output in Libya, Algeria and Yemen had not been affected by political turmoil and that it was confident about the future of the group's assets in the Arab region.

(Reporting by Vera Eckert in Frankfurt; Daniel Fineren, Emma Farge and Dmitry Zhdannikov in London, Svetlana Kovalyova in Milan, Wojciech Moskwa in Oslo; writing by Alex Lawler; editing by Keiron Henderson)

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