Libya Sees Progress to Restart Crude Output at Biggest Field

  • Committee meets to resolve disputes keeping oil ports shut
  • Oil exports from four of Libya’s nine export terminals closed

Libya is making progress in talks to resume crude production at two of its largest fields that have been closed for more than a year as rival governments and militias seek to control production and exports.

A committee formed to resolve issues that have stopped production at Sharara, Libya’s largest oil field, and Elephant met 10 days ago and “the situation is better than before because people in that area are keen to open the valve,” Mustafa Sanalla, chairman of Libya’s National Oil Corp. in Tripoli, said by phone Thursday. The oil fields have a combined capacity to produce 440,000 barrels of oil a day, and could resume full output within seven days of a decision to restart operations, he said.

Libya’s crude output has slumped to less than 370,000 barrels a day and exports to 260,000 barrels a day, out of a production capacity of 1.6 million barrels, Sanalla said. Conflicts between local militias and the rival administrations led to closures of fields including the southern Elephant and Sharara deposits and four of the country’s nine export terminals. Two governments emerged after the 2011 overthrow of Muammar Qaddafi, with an Islamist-backed one in Tripoli and an internationally recognized administration operating out of the east.

“The NOC is not beholden to any camp,” Sanalla said. “We are strictly, completely a neutral Libyan institution and our independence and activity have been recognized by the United Nations Security Council.”

The reduction in production has made the country with Africa’s largest oil reserves into the smallest producer in the Organization of Petroleum Exporting Countries. The eastern government has set up a separate NOC administration in an attempt to gain control of the country’s oil assets. So far, all of the country’s oil sales are going via the Tripoli-based headquarters in the west.

Before it's here, it's on the Bloomberg Terminal.