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Libya Production Creeping Up 11.12.2011

Oil production from Libya is definitely recovering after its prolonged shut-in due to the conflict in the country. According to the country’s state-run firm, National Oil Corp. (NOC), production levels now sit at 530,000 bpd. While current production is nowhere near pre-conflict levels, it has already exceeded the interim government’s expectations.

"We are now producing 530,000 barrels per day. The main problem (in reaching this level) was that the Sharara pipeline was blocked. But they have been very quick to fix this," a senior official at NOC told AFP. The pipeline was blocked during the conflict by NTC fighters to prevent Muammar Qaddafi’s forces from benefiting from the oil produced at the El-Sharara field. The El-Sharara is operated by Spain's Repsol.

The blockage was only one constraint holding Libya’s production recovery back; the strike by the Waha Oil Co. workers is also restraining a tidy sum of production from being restarted. Workers went on strike demanding that their boss resign due to his alleged corruption and ties to the Qaddafi regime. The dispute is keeping a much needed 360,000 bpd shut in. While the total capacity would not resume immediately, every little bit of production flow aids Libya in reaching pre-conflict levels and establishes a return to normalcy in the industry.

It was also reported that those companies operating in Libya before the end of the Qaddafi regime will be happy to hear that the NTC plans to adhere to all previous contracts. The NTC’s vice chairman Abdel Hafiz Ghoga said the economy was a priority for the NTC and that it would "respect all previous oil contracts," with foreign companies.


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