[LINK] "Libya Peace Deal Won't Be Enough to Restore Former Oil Output"

[rfmcdonald]

Bloomberg's article about continuing instability in Libya, and its conséquences, is depressing.

Libya’s United-Nations-brokered peace deal may help calm deepening political turmoil, but the North African nation will struggle to restore oil production to levels reached before the Arab Spring five years ago.

Output in the country with Africa’s largest oil reserves has slumped almost 80 percent since Muammar Qaddafi was toppled. Representatives from the two rival factions that emerged after a 2011 rebellion ended the dictator’s 42-year rule -- an Islamist-backed government in Tripoli and an internationally recognized administration operating out of the east -- signed a peace deal on Thursday, paving the way for shuttered oil fields and export terminals to be reopened.

While a lasting peace deal would allow the North African country to ramp up its output from below 400,000 barrels a day last month, the threat from Islamic State in the oil-producing Sirte region means the situation may get worse in the short term, according to Richard Mallinson, a London-based geopolitical analyst at Energy Aspects Ltd.

“There’s no immediate signs that it’s opening up oil facilities,” he said by phone. “The risk is that this expansion of Islamic state into the Sirte basin and some of the producing fields there is a bigger risk than production coming back.”