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Will Libya’s Production Rebound As Its Largest Oil Field Re-Opens?

Wafa

Libya’s biggest oil field, Sharara, which has been offline for most of the past month, is set to reopen after the Petroleum Facilities Guard (PFG) reached an agreement with protesters who have repeatedly shut down the pipelines that pump oil into the field, according to PFG chief, Brigadier General Idriss Abu Khamada.

The deal that the PFG has reached will lead to the reopening of the Sharara field, which produces 200,000 bpd, according to Khamada.

At the end of March, unnamed armed factions were said to have blocked production at the Sharara and Wafa fields in western Libya, cutting the country’s total output by 252,000 bpd. Sharara alone produced 220,000 bpd before the shutdown, accounting for a large part of Libya’s overall 700,000 bpd production until that point. It resumed pumping oil after a two-year pause last December.

Less than a week later, Libya’s National Oil Corporation (NOC) said that after intervention from its chairman Mustafa Sanalla, the militia men agreed to release the pipeline so the oil flow could be resumed.

Another week later, production at Sharara was stopped again.

Last week, reports suggested that the El-Feel oil field in western Libya—operated by a joint venture between Italy’s Eni and Libya’s National Oil Corporation (NOC)—had reopened after two years, and expects to start pumping oil as soon as a power outage is fixed. Related: Low Oil Prices Force Abu Dhabi To Sell U.S. Assets

Libya’s NOC said on April 20 that El-Feel continues to be closed and under force majeure due to dependence on electricity sourced from Sharara, which remained closed as of last Thursday.

NOC has said that it would target production of around 1.2 million bpd by the end of this year, but this level is currently nowhere in sight. As per OPEC’s secondary sources, Libya – exempt from the production cuts due to the violence – produced 622,000 bpd in March, down from 683,000 bpd in February.

By Tsvetana Paraskova for Oilprice.com

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