Libya's Largest Oilfield Resumes Production

Production has partially resumed at Libya's largest oil field after a force majeure was imposed on it earlier this month, the operator of the field, Spain's Repsol, told Argus this week.

The National Oil Corporation, which imposed the force majeure, had not confirmed the restart of production as of the writing of this article.

El Sharara has the capacity to pump as much as 300,000 bpd, which makes it a target for various factions in Libya's politically fragmented landscape. The latest suspension of production resulted from anti-government protests that shut down two export terminals.

According to the NOC, "a group of individuals put pressure on workers in the Al-Sharara oil field, which forced them to gradually shut down production and made it impossible for the NOC to implement its contractual obligations." 

The NOC said it was "obliged" to declare a state of force majeure on El Sharara "until further notice." 

According to Repsol, however, the El Sharara field is producing again, at a rate of 70,000 bpd.

"Today, roughly speaking we are producing in gross terms about 70,000 b/d, more or less 25pc of the field," the chief executive of the Spanish company told Argus.

The export facilities that were shut down earlier this month appear to remain under force majeure.

"At a time when oil prices are recovering significantly due to increased global demand, which is being exploited by all producing countries to increase their oil revenues, the Libyan crude is being subjected to a wave of illegal closures, which will have serious damage to wells, reservoirs and surface equipment for the oil sector, as well as the loss of state treasury opportunities at prices that may not be repeated for decades to come," the National Oil Corporation said earlier this month.

The latest production disruptions are happening as Libya eyes substantial expansion of its oil production in order to take better advantage of higher oil prices. The plan is to boost production to 1.4 million bpd. Currently, per the latest OPEC figures, Libya is producing around 1 million bpd.

By Irina Slav for Oilprice.com

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