Libya's Sirte Oil to cut crude production

London (Quantum Commodity Intelligence) - A second Libyan oil producer said it would have to cut as much as 100,000 barrels a day of output this week, a further sign that a budgetary crisis is threatening the OPEC member's energy industry, according to Bloomberg.

Sirte Oil Co. will be forced to "reduce production and halt it completely within 72 hours," the company said in a statement Thursday to its parent, the National Oil Corporation.

The eastern-based firm blamed its "very critical financial situation, the inability to fulfil contractual obligations to contractors, accumulation of debts and the lack of spare parts, fuel and chemicals required for operations."

The move follows the National Oil Corporation's declaration of force majeure on oil exports from the port of Hariga, citing lack of funds for infrastructure repairs, pushing the country's crude oil production below 1 million bpd for the first time in months.

NOC subsidiary Arabian Gulf Oil Co., or Agoco, has halted output at some of its fields due to the government's failure to send federal funds since September for operations.

This had forced Agoco to reduce its output as it was unable to "fulfil its financial and technical obligations" and it could be forced to reduce its crude output by 280,000 b/d, NOC added.

The state-owned company said this was "a result of the Central Bank of Libya's refusal to liquidate the oil sector budget for months."