2017 is already shaping up…
Refiners have begun cutting back…
Libya has restored oil production to around 700,000 barrels per day after losing 60,000 barrels per day to a technical malfunction at the Sarir oilfield over the weekend.
"We have made some repairs, our workers made some modifications, so now we are back to production," NOC Chairman Mustafa Sanalla was quoted as saying.
Libyan oil production prior to the incident at the substation was around 700,000 barrels per day at the start of January. Libya is seeking to raise production to 900,000 barrels per day in next few months, and 1 million barrels per day by the end of this year.
Thanks to the reopening of oil ports in the Oil Crescent and the refurbishment of pipelines, Libya has managed to more than double its crude oil output from 300,000 barrels per day in September.
However, the NOC’s ability to raise oil production remains limited due to the absence of supporting oilfield service companies, such as Schlumberger, Halliburton and Baker Hughes.
With that in mind, Libya announced earlier this week that it would re-open its oil sector to new foreign investments to help ramp up production for the first time in five years.
“We intend in the coming months to lift our self-imposed moratorium since 2011 on foreign investment in new projects to achieve the best national interest for the Libyan oil sector and for Libya as a state,” Sanalla said, adding that NOC-led projects to expand oil production could provide domestic economic stimulus and security, while the country seeks to increase oil production to 1.25 million barrels per day by the end of 2017 and 1.6 million barrels per day by 2022.
Libya—home to Africa’s largest reserves—froze all new foreign investment in 2011 after the 17 February revolution.
French Total SA, ConocoPhillips, and Italian Eni have been operating in Libya for years, and have continued to operate despite the instability.
Sanalla said he had been waiting for a “legitimate government with a mandate from the people to come to power” before allowing foreign investment again.
According to Sanalla, before the civil war, studies had estimated Libya’s oil industry required investments between US$100 billion and US$120 billion.
By Damir Kaletovic for Oilprice.com
More Top Reads From Oilprice.com:
Damir Kaletovic is a veteran investigative journalist covering Europe and the Middle East, and a senior consultant for Divergente Research.