While the OPEC+ group considers extending the production cuts for three months, oil output in Libya continues to increase and has returned to 1.25 million bpd, the level the OPEC member exempted from the cuts was pumping before the port blockade in January, Argus quoted Libya's National Oil Corporation (NOC) as saying on Thursday. The state corporation has also discussed potential fresh investments from France's supermajor Total in Libya's oil industry, NOC said, as carried by Argus.
If Libya's current level of production holds, it will give OPEC+ another headache next year, considering that Libya is exempted from the cuts and at the time the new OPEC+ pact was agreed, the North African producer was pumping less than 100,000 bpd due to the eight-month-long blockade that ended in September.
At the end of last week, Libya's production was already exceeding 1.2 million bpd, sources in the Libyan oil industry told Reuters.
Production in Libya started to rise in the middle of September after the self-styled Libyan National Army (LNA) of General Khalifa Haftar lifted the blockade on Libyan oil fields and terminals. Since mid-September, Libya's NOC has gradually lifted force majeure on the oil terminals and oilfields, and Libya's crude oil production rose from below 100,000 bpd during the blockade to as much as 500,000 bpd in the middle of October.
Related: Total Bets Big On Libya's Oil Industry
Within a month, Libya's production could reach 1.3 million bpd, NOC's chairman Mustafa Sanalla told the Wall Street Journal last week.
Even though Libya's oil production has hit 1 million bpd, the OPEC member will not join the OPEC+ quotas until its output stabilizes at 1.7 million bpd, Sanalla told Wall Street Journal reporter Benoit Faucon.
The return of Libyan oil has been a growing concern for the oil market and for the OPEC+ group as well because the outlook on global oil demand is clouded again by the second coronavirus wave.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More