Production at one of Libya’s largest oilfield has restarted, pumping at more than 90% of its capacity, the latest sign of an improvement in the North African country’s troubled oil sector.
National Oil Corporation spokesman Mohammed al-Harari said on July 9 that 325,000 barrels were pumped from the southwestern Sharara oilfield, which is one of Libya’s largest at 340,000 barrels per day. Production resumed a day earlier, following repeated halts because of protests in the area.
Libya’s oil industry has been disrupted by clashes between various armed groups that disagree with the government, and has lost at least $14 billion over the past nine months due to port blockades.
Libyan agreement frees crude
In a boost to the country’s troubled sector, the government reached an agreement last weekend with eastern rebels to regain control of two oil ports there. The rebels had seized the ports for nearly a year, halting exports and demanding a share of the revenues and political autonomy.
London-based oilanalyst ManouchehrTakintoldNew EuropeonJuly 10 that the agreements between the so-called rebels and the Libyan government will allow the loading of oil.
Libyan oil production is slowly ramping up from lows of just 150,000 barrels per day in June, though it remains well below the 1.5 million-1.6 million barrels per day Libya was producing before the current spate of unrest began in May 2013. “Libyan production was 1.6 million before,” Takin said. “If it goes back, it is a notable quantity of oil,” he said, adding that it would significantly increase the output of the Organization of Petroleum Exporting Countries (OPEC).
The revival of Sharara oil extraction should allow Libya to significantly increase its overall oil production volumes. Libya plans to begin using the full capacities of the Es Sider and Ras Lanuf ports.
The prospect of returning supply from Libya has contributed to a further drop in oil prices. “The news this past weekend from Libya made the price of oil come down,” Takin said.
Oil prices keep falling
US benchmark crude fell $1.11 on July 9 to close at $102.29 in New York. That’s slightly lower than the price on June 6, before insurgents seized the Iraqi city of Mosul, and 5% below the 10-month high of $107.26, reached June 20 at the height of concerns about the insurgency. Brent crude, a benchmark for international oils used by many US refineries, fell 59 cents, to $108.47 in London.
Meanwhile, tensions between Israel and Hamas have escalated in the past week but aren’t threatening any oil production.
“In Libya we have actual physical oil coming into the market. In the case of the Palestinians, it’s a human tragedy but as far as oil is concerned, I don’t think it will have any direct effect on the physical supply – it’s more physiological impact,” Takin said.
http://www.neurope.eu/article/libya-resumes-oil-production-major-field