Libya Oil Flow Rebounds From 10-Month Slide; Field StartsRobert Tuttle and Saleh Sarrar
Libya’s oil production is rising for the first time in 10 months after the North African country started a field in the south and smaller deposits elsewhere resumed after months of disruption.
Flows from Sharara are set to reach 340,000 barrels a day today, Mansur Abdulla, oil movement coordinator at Zawiya Refinery, said in a phone interview. The field, near Ubari in the south, had been closed for about 90 days because of protests. Libya’s total daily output will rise to 600,000 barrels by tomorrow, according to Ibrahim Al Awami, head of measurement and inspection at the oil ministry.
Output from the nation, once North Africa’s biggest producer, slumped to 210,000 barrels a day in December amid protests across the country, according to data compiled by Bloomberg. That’s the lowest since Muammar Qaddafi was overthrown and killed in 2011. Sharara restarting is a “good sign” and will help Libya’s government in its negotiations with rebels holding eastern ports, said Robin Mills, head of consulting at Manaar Energy Consulting and Project Management.
“It does take a bit of pressure off the government and it puts them in a stronger position,” Mills said by phone from Dubai. “The issue in the east is really the exports.”
Brent crude, a global oil benchmark, fell 4.7 percent last week, the biggest such retreat since June 21, as Sharara protesters announced they would allow pumping to resume and output was partially restored at the Messla oil field in the east. Brent advanced as much as 1 percent in London today amid freezing U.S. weather and concern that clashes in Iraq may disrupt oil exports, before retreating to trade little changed near $106.90 a barrel amid a weekly increase in U.S. fuel stockpiles.
Libyan production rose to 1.6 million barrels in July 2012 as the country restored output following the 2011 revolt, according to data compiled by Bloomberg. It climbed as high as 1.8 million barrels a day in 2008.
The country’s oil output will probably average 650,000 barrels a day or more this year, Goldman Sachs Group Inc. said in a report today. Protests halted oil fields and four out of nine export facilities, according to data compiled by Bloomberg.
Libya’s navy stopped a Maltese-flagged tanker en route to the rebel-controlled port of Es Sider and warned the ship’s owners against dealing with anyone other than the National Oil Corp., NOC spokesman Mohamed El-Harari said by phone.
The oil-export terminal at Es Sider, the country’s biggest, has been shut since July 28, and other eastern 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 with rebels to reopen Hariga port fell through, Awami said Dec. 28. The facility can handle about 200,000 barrels a day. Closing ports in the east has cost Libya $10 billion in revenue, Libya News Agency reported Dec. 30, citing Economy Minister Mustafa Abu Fnas.
The 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 yesterday. 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 Oil 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.
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