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Libya oil output slashed by 1.4 million barrels a day

PARIS, Mar 11 – Unrest in Libya has almost wiped out production in its key oil sector, slashing output by 1.4 million barrels a day to under 300,000, the head of French oil giant Total said on Friday.

"Oil production in Libya must have fallen to between 200,000 and 300,000 barrels a day maximum," the chief executive of Total, Christophe de Margerie, told reporters in Paris.

"There are about 1.4 million barrels a day less" than normal, since the start of an uprising against Libyan ruler Moamer Kadhafi on February 15 which has led to heavy fighting between his forces and rebels.

Margerie\’s was the most severe estimate yet of the impact of the fighting on oil production. The International Energy Agency (IEA) on Thursday said it had shot "well below" the official Libyan estimate of 500 thousand barrels per day.

Libya was producing 1.69 barrels a day before the unrest, according to the IEA. Of this 1.2 million were exported, mostly to Europe. Other big customers are China and the United States.

"There is no problem of supply to the market," said Margerie however. "We have stocks so there is no risk of a shortage."

The world\’s biggest oil producer Saudi Arabia said last week it was committed to the stability of the oil market and to ensuring that oil supplies remain available amid the Libyan unrest.

Fighting raged this week around the key Libyan oil town of Ras Lanuf as Kadhafi forces bombarded rebel positions there. Kadhafi has accused the West of wanting to seize Libya\’s oil.

Margerie said that Total, one of the biggest oil companies in the world, had shut down its production at two Libyan oilfields, the offshore Al Jurf and onshore Mabruk sites, where it shares production with other companies.

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Company figures show that its Libyan operations account for 2.3 percent of its total production, about 55,000 barrels a day.

Crude prices turned lower in Asian trading on Friday as markets awaited further news on protests planned by activists in Saudi Arabia, analysts said.

New York\’s main contract, light sweet crude for April delivery, fell 97 cents to $101.73 per barrel in the afternoon. Brent North Sea crude for April dipped 39 cents to $115.04.

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