BP rethinking Libya operations after Algeria crisis

BP's operation at the Ain Amenas field was the scene of a four-day siege in which 37 foreign workers were killed. AFP

BP is reconsidering its operations in Libya after the terrorist attack on its gas facilities in Algeria and as industry concerns over security in Libya grow.

"We had expected to restart drilling at the end of the second quarter this year, but we're currently reviewing our plans," a BP spokesperson said.

The British oil major was left stunned by the attack on Ain Amenas gasfield - operated by BP, Statoil and Algeria's Sonatrach - which left 37 foreign workers dead after a four-day siege.

The incident immediately raised questions over Libya, where oil production has staged a strong comeback after the civil war, but where many of the fields lie exposed in remote desert locations.

BP had been exploring acreage in Libya before the civil war that ended Muammar Qaddafi's 42-year reign.

The security situation remains precarious. The militias raised to fight Gaddafi are struggling to control Libya's vast deserts, and it is widely believed that the Islamist terrorists who seized the Ain Amenas facility had crossed the country's hinterland on their way from Mali.

Libya's government has taken measures to protect the oil industry. Last September, Nuri Berruien, the chairman of the state-run National Oil Company told Bloomberg News that 10,000 militias were being trained as security guards and for border control, complementing an existing force of about 2,500.

Last week, Libya's deputy oil minister Omar Shakmak said that security forces at the border had been bolstered in response to the attack on Ain Amenas.

Yet experts agree that Libya is the North African country most vulnerable to attacks on its oil and gas installations, and oil companies are wary that the terrorist threat could spill across the border.

"We are observing and evaluating the security situation in Libya and in North Africa in general very carefully," said a spokesman for Germany's Wintershall, which is rebuilding its production and export capacity in the country. Libya's oil sector relies heavily on international oil companies, which also include Italy's ENI, ConocoPhillips from the United States and France's Total.

Prior to its civil war, the country produced 1.6 million barrels per day (bpd), and companies were quick to return when hostilities ceased. Output was ramped up faster than many observers had expected, and is now almost at pre-war levels. Mr Berruien said the country was targeting an increase to 1.8 million bpd this year.