Libya’s oil production may rise to 600,000 barrels a day, its highest since August, after production resumed at the Sharara field yesterday.
Oil from Sharara, a field able to produce 330,000 barrels a day, began flowing yesterday morning and is now going into storage tanks at the Zawiya terminal, Ibrahim Al Awami, head of measurement and inspection at Libya’s oil ministry, said by phone. The field, located near Ubari in the country’s south, had been closed for about 90 days because of protests.
Oil output from Libya, once North Africa’s biggest producer, fell from 1.6 million barrels in July 2012 to 210,000 barrels a day last month, the lowest since late Libyan leader Muammar Qaddafi was killed in a 2011 revolution, according to data compiled by Bloomberg. Protesters and armed groups have shut oil fields and four of nine export terminals.
U.K. crude prices fell 4.7 percent last week, the biggest weekly fall since June 21, as Sharara protesters announced they would allow production to resume and the Messla oil field restarted. An increase in Libyan exports would be needed for prices to fall further, according to Tom James, a Dubai-based managing director of Navitas Resources Ltd., an energy and commodity markets adviser.
“On the eastern side, the ports have not opened up yet,” James said by phone. “Until those ports start getting freed up, there won’t be a further negative impact to prices.”
The oil-export terminal at Es Sider, the country’s biggest, has been shut since July 28, and ports at Ras Lanuf, Hariga and Zueitina are also closed for crude shipments. The ports of Zawiya and Brega are operating, as well as the terminals at Mellitah, Al Jurf and Bouri.
An agreement reached with rebels last month to reopen the Hariga port, which can ship as much as 200,000 barrels a day, fell through, Awami said Dec. 28. Closure of the ports in the east has cost Libya $10 billion in revenue, Libya News Agency reported Dec. 30, citing Economy Minister Mustafa Abu Fnas.
The new Sharara crude will be used to restore production at the 120,000-barrel-a-day Zawiya refinery to full capacity within two to three days, Awami said. The first cargo of Sharara crude may be exported from Zawiya next week, he said.
The Messla field as well as the Tobruk and Sarir refineries started late last month, state-run National Coil Corp said Dec. 30. Between 25,000 barrels and 38,000 barrels a day are being pumped daily from Messla and the nearby Sarir, which have a combined capacity of 280,000 barrels a day, Awami said Jan. 2.
The likelihood of a resumption of oil exports from eastern Libya by the end of the first quarter is “high” as export ports may reopen, Riccardo Fabiani, a London-based analyst at Eurasia, said in a research note Dec. 18.