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OPEC Cheating Will Cap Oil At $52

OPEC Cheating Will Cap Oil At $52

Oil prices rallied strongly following…

Power Issues Cause Libyan Output To Plunge By 70,000 Bpd In Days

North Africa oil

Power issues in key Libyan oilfields caused national oil output to drop by 70,000 barrels per day over the past week, according to Mustafa Sanallah, the chairperson of the Libyan National Oil Corporation (NOC).

Electric failures in the Waha and Diffa fields compromised 60,000 bpd of production at the locations, the executive said. At maximum capacity, Waha alone produces 100,000-120,000 bpd.

Late Wednesday, NOC technicians visited the two fields and managed to solve the power issues. Since then, the national production rate has inched back up to 600,000 bpd.

Sanallah told Reuters earlier this week that an explosion caused by an electrical issue in the Laheeb oil field cost the NOC 19 million barrels of crude and 15-17 million cubic feet of natural gas.

Libya almost doubled production from September to October of this year as the country begins its recovery after years of domestic strife. After the post-Arab Spring fall of dictator Muammar Gaddafi in 2011, regional governments and the Islamic State (ISIS) have competed in a power vacuum for control over the country’s oil resources.

By the end of 2016, the North African country hopes to churn out 900,000 bpd, thanks to oil industry stability introduced by Khalifa Haftar – a Gaddafi loyalist who leads one side of the country’s civil war and has rejected the United Nations supported Government of National Accord.

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Haftar handed control of Libya’s main oil terminals back to the NOC earlier this year, allowing oil exports to resume.

Libya will be exempt from the Organization of Petroleum Exporting Countries’ coming production freeze, which aims to correct the ongoing supply glut permeating global oil markets, although any additional oil production on Libya’s part will offset whatever OPEC cuts are announced on 30 November, if they are able to reach an agreement.

Nigeria will also be exempt from much-anticipated cuts to be finalized during the 30 November meeting between the industry cartel’s members in Vienna.

By Zainab Calcuttawala for Oilprice.com

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