Libya is getting closer to realizing its goal of boosting crude oil production to 1 million barrels per day after it struck an agreement with German Wintershall that led to the restart of fields with a combined output of 160,000 bpd. The National Oil Corporation (NOC) and the German company were locked in a dispute concerning payments NOC said Wintershall owed. Now the dispute seems to have been resolved and NOC is on track to raise production from about 830,000 bpd right now, to 1 million bpd by the end of next month.
It’s not what OPEC wants to hear in the middle of an increasingly desperate attempt to prop up prices. Oil production across OPEC rose by about 336,100 barrels per day to 32.1 million bpd in May, due to production increases from Nigeria, Iraq and Libya. Nigeria and Libya are not subject to the group’s restraint deal agreed last year. Output from Libya surged by more than 178,000 bpd to 730,000 bpd as the country's rival factions moved toward reconciliation, and supplies disrupted throughout years of conflict remained on line. There’s always, however, a big ‘if’ with Libya.
Nothing is certain with Libya’s fractured political system and there is a constant possibility of militant groups trying to take control over oil export terminals, fields, or pipelines.
Lately, tension between political groups, each with their own militia affiliates, has spiked in the form of fallout from the Qatar crisis. The eastern government…