Libya Oil-Output Boost at Eastern Fields Offsets Drop at Sharara

TRIPOLI (Capital Markets in Africa) – Libya is ramping up oil output at its eastern fields, offsetting thousands of barrels in production lost from the partial shutdown of the country’s biggest deposit after gunmen kidnapped workers there.

The North African nation’s overall production rose to 650,000 to 700,000 barrels a day and is expected to rise further after shipments resume at eastern ports that re-opened after a political standoff last week, according to a person familiar with the situation who asked not to be identified for lack of authorization to speak to media.

In western Libya, production at Sharara, the country’s largest oil field, fell to 130,000 barrels a day from more than 300,000 after an armed group abducted employees on July 14, according to two people familiar with the situation who asked not to be identified because they too aren’t authorized to speak to news media. The country was pumping 527,000 barrels a day as of July 9, Mustafa Sanalla, chairman of the Tripoli-based National Oil Corp., said at the time.

Largest Reserves
Libya, with Africa’s largest crude reserves, re-started shipments from its eastern oil ports on July 11, and the NOC lifted force majeure restrictions at the western El-Feel field on the following day. While those were positive developments for the country’s oil industry, repeated supply disruptions highlight the hurdles for Libya as it seeks to restore reliable crude flows after years of political division and internal conflict.

The halts also complicate efforts by the Organization of Petroleum Exporting Countries, of which Libya is a member, to pump more crude.

Waha Oil Co. is pumping as much as 80,000 barrels a day of crude that should reach the eastern port of Es Sider, Libya’s biggest export terminal, late Tuesday, a person familiar with the matter said. Waha’s production will rise gradually and reach its normal level of some 300,000 barrels a day after loadings resume at Es Sider, the person said.

The Sharara kidnappers released two of the four workers they abducted later the same day, though they continue to hold two others — one Romanian, the other Libyan, the NOC’s Sanalla said in Tripoli. He urged local communities near the oil field to “let reason prevail and release two of our workers as soon as possible,” in a video posted on the NOC Facebook page. Sanalla gave no details about the kidnappers or their possible motives.

Sporadic disruptions, from protests to armed attacks, have upset Sharara’s production in recent months. The field was producing more than 300,000 barrels a day before the latest attack. The port of Zawiya, where Sharara feeds its crude, was set to ship 6.93 million barrels of crude this month, according to a loading plan obtained by Bloomberg.

Sharara is operated by a joint venture between the NOC and Total SA, Repsol SA, OMV AG and Equinor ASA, known formerly as Statoil ASA.

Source: Bloomberg Business News