Libya’s Biggest Oilfield Resumes Production

Libya’s largest oilfield, Sharara, restarted oil production this weekend following weeks of shutdown over protests, sources in Libya told Argus on Monday.

Sharara, with a capacity to pump 300,000 barrels per day (bpd), was closed in the middle of April after a blockade from protesters demanding a transfer of powers from Prime Minister Abdul Hamid Dbeibah, who has been refusing to step down for newly sworn-in eastern Prime Minister Fathi Bashaga. Disputes over the distribution of oil revenues have also led to blockades at several Libyan oilfields, including Sharara.

In April, Libya loaded just 819,000 bpd of crude from its ports, down from nearly 1 million in March and the lowest volume since October 2020, per tanker-tracking data that Bloomberg is monitoring.

Oil exports from the OPEC producer exempted from the OPEC+ deal were depressed in May, too, as the blockade and political disputes continued.

Libya expects to open all its oil loading terminals after it sets up a mechanism for a fair distribution of the country’s oil revenues among the regions, Parliament Speaker Aqila Saleh told U.S. ambassador and Special Envoy to Libya, Richard Norland, Benghazi-based news outlet The Libya Update reported last month.

The Parliament-backed Libyan Prime Minister Fathi Bashagha, who was elected in February, said on Twitter in early May that Libya’s oilfields were expected to reopen soon, after militias agreed to lift the siege on oil facilities.

However, it took another three weeks for production at Sharara to resume.

According to Argus’ sources, production at the biggest Libyan oilfield restarted at a rate of 180,000 bpd on June 4. Sharara’s nearby 70,000 bpd El Feel oilfield remains closed as of Monday.

Volatile production in Libya has added to the huge uncertainties in the global oil market in terms of supply. Just last week, Libya lost 22,000 bpd of production due to a pipeline leak at the Sarir Tobruk oilfield, blamed on delayed budgets that have left the operating company unable to maintain its oil transport infrastructure.

By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

• New Drilling Stalls Out In The U.S. Oil Patch
  
• Could Iraq Dethrone Saudi Arabia As Largest Oil Producer?
• Citi: Oil Is Overvalued By $50 Per Barrel