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Cablegate: Environmental Disaster Averted: How Libya (Mis)Handled Recent Oil Tank Blaze

VZCZCXRO9941
RR RUEHTRO
DE RUEHTRO #0676 2401759
ZNY CCCCC ZZH
R 271759Z AUG 08
FM AMEMBASSY TRIPOLI
TO RUEHC/SECSTATE WASHDC 3823
INFO RUEHAS/AMEMBASSY ALGIERS 0754
RUEHRB/AMEMBASSY RABAT 0698
RUEHTU/AMEMBASSY TUNIS 0601
RUEHLO/AMEMBASSY LONDON 0898
RUEHFR/AMEMBASSY PARIS 0582
RUEHVT/AMEMBASSY VALLETTA 0339
RUEHRO/AMEMBASSY ROME 0468
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RUEHTRO/AMEMBASSY TRIPOLI 4337

C O N F I D E N T I A L TRIPOLI 000676

SIPDIS

DEPT FOR NEA/MAG, COMMERCE FOR NATE MASON, ENERGY FOR GINA
ERIKSON

E.O. 12958: DECL: 8/26/2018
TAGS: ENRG EPET ECON PGOV LY CA
SUBJECT: ENVIRONMENTAL DISASTER AVERTED: HOW LIBYA (MIS)HANDLED RECENT OIL TANK BLAZE REF: TRIPOLI 368

CLASSIFIED BY: Chris Stevens, CDA, U.S. Embassy Tripoli, State. REASON: 1.4 (d)

1. (SBU) Summary: On August 19, a storage tank for crude oil caught fire during routine maintenance operations in Ras Lanuf, the site of Libya's largest oil refinery and a petroleum port. The fire was isolated to one tank after burning for two days. There were no casualties and oil exports from the port of Ras Lanuf were not immediately affected. The long-term impact on production and the tank farm is not yet clear. The incident highlighted, however, shortcomings in the capacity of Libya's National Oil Company (NOC) and the Government of Libya to respond to such incidents. End Summary.

2. (C) According to Ian MacIntosh (strictly protect), General Manager of Petro-Canada in Libya, the fire began the morning of August 19 inside one of the thirteen tanks at the Ras Lanuf facility, and pressure caused by the fire helped prompt a leak of oil through a faulty valve at ground-level. Oil spread into a ditch, surrounded by a dirt berm encircling the tank. That oil then caught fire as well, further heating the tank from outside. The tank in which the fire began has a capacity of 460,000 bbl. The structural integrity of the tank remained intact; however, there were concerns about whether that would hold. MacIntosh noted that public remarks by NOC Chairman Shukhri Ghanem that most of the oil in the tank was from fields developed by Petro-Canada were misleading. Only 2-4% of the oil in the tank was Petro-Canada's; the rest was NOC oil. Ghanem has also said that production would have to be reduced from 70,000 to 100,000 barrels per day (bpd); however, McIntosh told PolEcon Chief that Petro-Canada has not yet concluded that such would be the case.

3. (SBU) While some 1,000 Libyan police, firefighters and NOC employees were on-site by the end of the day on August 20, the incident has underscored real limitations in the capacity of the NOC and the GOL to respond to such issues. According to press reports, Libya was already producing below its full capacity of 1.85 million barrels per day (bpd) before the fire, in part due to a drilling accident last May in an offshore field which cut output by 45,000 bpd (see reftel). In addition, maintenance on a pipeline for associated gas in the Sirte region has reduced output by 100,000 barrels a day since July.

ENVIRONMENTAL DISASTER AVERTED

4. (C) Coincidentally, a new Health, Safety & Environment (HSE) officer for Petro-Canada arrived in Libya the day just before the blaze. He was quickly dispatched to the scene. MacIntosh stressed that the biggest value the HSE officer added was not what he did (oil firefighting capabilities here are limited), but rather, what he prevented officials of the NOC and GOL from doing. At one point, they were seriously considering emptying the burning tank (about 200,000 bbls of oil were still in the tank at that point) into the adjoining desert, which would have been "an environmental nightmare." The HSE officer dissuaded them from carrying out this plan.

AN INEFFECTIVE RESPONSE

5. (C) Comment: The reaction of the NOC and Libyan authorities has been judged by the tightly-knit community of international oil community (IOC) representatives here to have been ill-coordinated and ineffective, underscoring real limitations in the capacity of the NOC and the GOL to respond to such incidents. Efforts by the NOC to increase production from 1.8 million bpd to 3.0 million bpd will further stress the oil and gas infrastructure, much of which suffered for lack of maintenance during the period in which international sanctions against Libya were in place. End comment.
STEVENS

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