Oil prices remained rangebound in…
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Libya’s oil production has reached 780,000 barrels per day – the highest level since October 2014, according to new data collected from an anonymous source by Bloomberg.
Oil prices have been tumbling since last week, when both Libya and Nigeria – the countries exempt from OPEC’s production reduction deal – reported climbing outputs as the nations recover from years and months of domestic strife, respectively.
The Organization of Petroleum Exporting Countries (OPEC) is expected to extend the deal it made amongst itself and 11 non-OPEC countries last November. On May 23rd in Vienna, the bloc will meet to make a final decision regarding the future of the 1.2 million-barrel output cut.
Oil profits will be the lifeblood of any successful future government in Libya. Under dictator Muammar Gaddafi’s reign, fossil fuels made up over 90 percent of Tripoli’s revenues, which the government used to provide heavy food and consumer goods subsidies to its citizens in exchange for loyalty.
After years of internal struggle, the National Oil Company (NOC) has managed to develop a firm grip over 90 percent of Libya’s oil export revenues. The company achieves this by claiming to maintain its independence from various factions vying to run the country until elections are held, but in recent weeks, an NOC official condemned the United Nations-backed Government of National Accord, breaking from established protocol.
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The new brazen face of the NOC comes as production recovers quickly due to a drop in fighting within the country.
The Waha field in eastern Libya has recovered lost production to a 75,000-barrel-per-day (bpd) level as of Friday, according to a field engineer who spoke to Reuters last week.
Fighting between militia groups affiliated with a rival government and other violence had caused a linked pipeline to become damaged, hampering output since early March, when the field last produced at the current level. Waha’s total capacity is 120,000 bpd.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…