Recent disruptions of oil production in Libya have cost the country 350,000 barrels daily in lost output, the central bank of the country said, adding that the effects of these disruptions will force it to curb spending further even though it has been trying to avoid this.
Before the recent string of production disruptions, which were caused by militant blockades on pipelines carrying crude from three fields to export terminals, Libya was pumping over 1 million barrels of oil daily, eyeing 1.2 million bpd in output by the end of the year.
But earlier this month, the largest field in the country—Sharara—shut down, followed by El Feel and Hamada shutdowns last week as well. The Hamada field resumed production on Monday, Bloomberg reported, citing an unnamed source. It is, however, the smallest of the three, so most of the production that the recent attacks took offline remains offline.
The central bank of Libya also said in its statement that militant activity, protests, and production shutdowns have cost the country over US$160 billion in direct and indirect losses. Gross domestic product so far this year has fallen to US$14.07 billion (19 billion dinars) from US$83 billion (112 billion dinars) in 2012. The institution added that the current environment “more than at any other time before, requires greater effort to protect the only source of income for Libyans.”
Libya and its growing crude oil output became a major worry for OPEC in the last few months when attacks on fields and pipelines largely subsided, allowing the country holding Africa’s biggest oil reserves to recover its production to over 1 million barrels. Libya was exempted from OPEC’s production cut agreement, and its production increase has been seen by market participants as a headwind for international prices, along with U.S. shale though to a lesser extent.
By Irina Slav for Oilprice.com
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