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Over the weekend the Libyan army confronted armed protestors that have taken control of oilfields and ports, issuing the message that they must allow crude oil production and exports to resume or face military action.
Libya is now hopeful that their oil exporting ports will all be up and running by the 10th of December, and that production at oilfields should be back to full capacity about a week later.
Abdelbari al-Arusi, the Libyan Oil Minister, told reporters that he believed the pressure put on protestors would allow the country’s oil production to resume and quickly build up to 1.5 million barrels a day, a little more than was being produced before the protests began.
When asked how the protestors reacted to the military’s threats al-Arusi would give no comment, but said that “we have heard good news from the local people that they are going to attend to the situation. We don't have any guarantees.”
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Protestors, consisting of a mix of militias, tribesmen, and political minorities that had decided to take the country’s oil industry hostage whilst it made demands for more political power and a greater share of the oil wealth generated by Libya, managed to cut the country’s oil output from 1.4 million barrels a day five months ago, to just 225,000 barrels a day at the moment.
When asked about the amount of time it would take for production to return to normal levels once fields and ports reopened, al-Arusi suggested just “one week to 10 days.”
Traders and analysts from the industry have shown scepticism towards the claims that full production will resume in such a short period of time, claiming that it normally takes months to build production levels after a lengthy disruption.
Andrey Kryuchenkov, a strategist at VTB Capital, told Reuters that “this looks wildly optimistic. I can't see Libya reopening all the ports quickly, and then it would take much longer to get back up to 1.5 million bpd full output.”
By. Joao Peixe of Oilprice.com
Joao is a writer for Oilprice.com