U.S. Oil Feeding Europe, as is Oil from Libya, Kazakhstan

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Written by Daniel Graeber for IIR Energy Intelligence (Sugar Land, Texas)

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Summary

OPEC economists in their monthly market report for February found U.S. crude oil was the primary source of European imports, supported elsewhere by Kazakhstan and Libya. On Wednesday, Libya awarded licenses from its first auction since 2007.

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U.S. Main Source of European Oil

The U.S. provided the largest share of crude oil exports to the European Union last year, though fringe players such as Libya were supportive, economists at the Organization of the Petroleum Exporting Countries (OPEC) said Thursday.

The U.S. is the world leader in crude oil production, with output expected to average 13.6 million barrels per day (BBL/d) this year, according to U.S. federal estimates. In an ironic twist, much of the U.S. refinery sector is tailored to run heavier slates of crude oil rather than the light, sweet crude oil found in U.S. shale basins.

Over the four-week average to February 6, U.S. federal data show crude oil exports averaged 4.1 million BBL/d, relatively unchanged from the same period last year. Economists at OPEC said in their market report for February that the U.S. was the largest crude oil exporter to Europe to October, the last full month for which it had data, at 1.4 million BBL/d.

Along with liquefied natural gas (LNG), Europe may be leaning too heavily on the U.S., though a downturn in relations over disputes over U.S. annexation efforts with Greenland could upend trade.

Outside of U.S. supplies, OPEC economists said Kazakhstan and Libya combined for another 1.9 million BBL/d to the European economy, with Kazakhstan supplying the bulk of that with 1.1 million BBL/d. OPEC put European refinery throughput at about 11.2 million BBL/d.

Kazakh exports could be impaired, however. A suspected Ukrainian drone strike in late November hobbled an export terminal for the CPC pipeline, one of the largest crude oil delivery networks in the world. Authorities reported damage to a berth at the Novorossiysk Refined Products & Chemicals Storage Terminal, which handles deliveries from Kazakhstan through the Caspian Pipeline Consortium (CPC).

Subscribers to Industrial Info's Global Market Intelligence (GMI) Oil & Gas Terminals Plant Database can learn more about the terminal--including capacities, investment values and necessary equipment--in a detailed plant profile.

OPEC economists put Kazakh crude oil production at 1.3 million BBL/d for January, down 23% from November levels. Libyan production averaged 1.3 million BBL/d last month, up 1% from January.

By the Numbers

• 1.4 million BBL/d of U.S. oil to Europe
• 1.9 million BBL/d from Kazakhstan and Libya combined
• 11,000 square miles in offshore acreage tapped

Libya Awarded Licenses for the First Time in Decades

On Wednesday, Libya, still politically divided from civil war in 2011, awarded its first oil and gas exploration blocks to foreign companies since 2007. Winners for the rights to drill on and offshore included U.S.-based supermajor Chevron and Italian energy company Eni.

Building on a memorandum of understanding (MOU) with Libya's National Oil Corporation, Chevron said it secured the rights to explore the onshore Sirte Basin.

"Libya has significant proven oil reserves and a long history of producing its resources," said Kevin McLachlan, a vice president of exploration at Chevron. "Chevron is confident that its proven track record in developing oil and gas projects and its technical expertise gives it the ability to support Libya to further develop its resources."

Industrial Info finds Libyan-based energy companies dominate much of the domestic upstream sector, with the Benghazi-headquartered Arabian Gulf Oil Company holding the most assets.

Subscribers can access a detailed project list to find the companies working currently in Libya.

Working alongside QatarEnergy, meanwhile, Italian energy company Eni said it would plan for seismic surveys offshore to determine target basins in the offshore Sirte Oil and Gas Province, which covers some 11,000 square miles in the Mediterranean Sea.

The Italian company said it's played a role in Libya since 1959, claiming it's the leading international player in the country with equity production of 162,000 barrels of oil equivalent per day in 2025.

Libya nonetheless remains divided between rival political factions. Last week, Saif al-Islam Gadhafi, the son of late dictator Moammar Gadhafi, was assassinated at his home in Libya.

Key Takeaways

• OECD Europe gets most of its oil from U.S.
• Chevron, Eni winners of Libyan auction.
• Libya still politically divided.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR News Intelligence) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 250,000 current and future projects worth $30.2 trillion (USD).