Libya crisis wreaks havoc on oil prices

Oil prices hit two-and-a-half-year highs in Asian trade on Thursday as violence continued to wrack the Middle East and threatened to spread to other bigger oil producers in the region, but on Friday crude prices dipped a bit as fears over supply eased with oil cartel OPEC promising to boost output to make up for any production loss in revolt-hit Libya, analysts said.

Continuing political turmoil in Libya and the Middle East has led to investor worries over global economic recovery in view of rising crude oil prices, sending stock markets on a steep slide.

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Brent North Sea crude oil hit 29-month high yesterday to nearly $120 a barrel, and the light sweet crude for April deliveries to above $100 mark in New York. India imports nearly 70 per cent of its oil requirements.

Emerging-market currencies were mostly weaker as Libya's crisis and rising oil prices spread some risk aversion through markets, though emerging-market debt firmed slightly versus United States Treasury.

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Market sentiment appears to be extremely fragile amid concerns that the simmering political tensions in the Middle-East and North African would lift crude oil prices further. Any spike in oil prices is bad for the Indian economy as it will adversely affect the already high current account gap.

ONGS,OIL evacuating staff from Libya

State-owned Oil and Natural Gas Corp and Oil India are moving staff out of Libya, fearing more violence in the North African nation that is facing a rebellion.

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ONGC has one staffer while OIL had two in the Libyan capital Tripoli and the two state firms are making arrangements to evacuate them by month-end.

"Contact with the officer has been intermittent," ONGC chairman and managing director A K Hazarika said, "We are working with Union external affairs ministry and the Indian Embassy in Libya to bring him back."

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OIL has been able to deliver air-tickets to its officers of two flights out of Tripoli.

"Communication through telephone and internet is very difficult. But we have been able to speak to them and have managed to send tickets across for a couple of flights out of Tripoli on Friday and the day-after," OIL chairman and managing director N M Borah said.

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Both the firms have authorised their staffers to leave Libya by whatever mean possible.

"We have (asked)our officer to be in touch with Indian Embassy in Libya," ONGC Videsh Ltd managing director R S Butola said.

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OVL, the overseas arm of the state explorer, had three blocks in Libya - Block NC-189 in Sirte Basin, Block 81-1 in Ghadames Basin in south-west Libya and Contract Area 43 located in Cyrenaica offshore basin in the Mediterranean sea.

The company had surrendered Block NC-198 and Block 81-1 after it did not discover any hydrocarbon and was working only on Contract Area 43.

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OIL is the operator of two exploration blocks in scrub desert area of Western Libya. The blocks, where Indian Oil Corp was an equal partner, had turned out to be dry and OIL had decided to relinquish them.

"We were in the process of winding up operations (when the unrest broke out in Libya)," Borah said.

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OIL had, some weeks back, applied to Libyan authorities for relinquishing the two onshore blocks - Block 86 and Block 102(4) in oil-prolific Sirte Basin.

OIL was the operator of the two blocks and held 50 per cent stake in the venture, while the rest was held by state refiner IOC.

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OIL-IOC had won the blocks in the Libyan Exploration and Production Service Agreement (EPSA IV) Bid Round I in 2004.

The official said OIL also has interest in Area 95/96 (Block 2/1, 2 & 4) with Algerian oil firm Sonatrach. OIL and IOC hold 25 per cent stake each, while Sonatrach is the operator with 50 per cent.

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The onshore block, located in the oil-prolific Ghadames Basin, was won in EPSA Bid Round IV in 2007.

Meanwhile, reports said that several thousand Indians are to be evacuated by air and the sea from Libya given "sharp and unprecedented deterioration" in the situation in the North African country witnessing anti-government protests that have claimed over 300 lives so far.

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The Indian government on Thursday decided to immediately commence evacuation of Indians and has sent a ship from Egypt to Benghazi to ferry about 1,200 people, starting with those with medical emergency, women and children.

It is also expecting landing permission for its aircraft soon and therefore, has kept aircraft on stand by.