Libya Ports Prepare to Resume Crude Shipments After Clashes

  • Exports from Es Sider, Ras Lanuf to resume in days: Alaokali
  • Libya pumping 646,000 barrels a day after Waha field restarts

Morse: Libya Production Should Be Volatile in 2017

Libya’s major oil ports of Es Sider and Ras Lanuf are resuming operations and preparing to export crude after a two-week halt in shipments due to armed clashes in the holder of Africa’s largest crude reserves.

Libya’s total production rose on Monday to 646,000 barrels a day from 621,000, mostly due to an increase from Waha Oil Co., Jadalla Alaokali, a National Oil Corp. board member, said by phone the same day. Waha Oil feeds into Es Sider, the country’s biggest oil port. Staff are returning to Es Sider and Ras Lanuf, the country’s third-largest, and exports are set to restart in a week to 10 days, Alaokali said Sunday. 

“Both ports are ready to restart exports,” he said. An oil tanker, still to be nominated, is set to load 1 million barrels of crude from Es Sider on March 26, according to a person familiar with the situation, who asked not to be identified because the matter isn’t public.

Waha Oil, a joint venture between the NOC, Hess Corp., Marathon Oil Corp. and ConocoPhillips, suspended production earlier this month after clashes between armed factions in the politically divided nation forced Es Sider and Ras Lanuf to suspend shipments. Waha Oil is “soon” expected to reach 75,000 to 80,000 barrels a day, the level it was at about two weeks ago before fighting broke out near the ports on March 3, according to Alaokali. The venture began pumping on Saturday.

The country’s biggest oil field, Sharara, will increase output by 70,000 barrels a day of crude in the next few weeks, from 221,000 barrels a day currently, the NOC said in a statement on its website Tuesday, citing Chairman Mustafa Sanalla. Sharara is operated by Repsol SA and is located in the far west of the country. Libya is “trying to attract more investments but is facing challenges” including delays in budget allocations and salaries, it said. It also cited political and security challenges.

Ports Recaptured

Forces loyal to Libya’s eastern-based military commander Khalifa Haftar regained control over the two ports on March 14. The fighting, including airstrikes, dealt a blow to international efforts to restore stability in the country. A rival group had seized Es Sider and Ras Lanuf earlier this month.

Brent crude added 11 cents, or 0.2 percent, to $51.73 a barrel at 5:03 p.m. in Dubai. The global benchmark has lost almost 9 percent this year.

Libya’s eastern oil region is safe now, and companies in the area can resume normal operations related to production and exports, Mustafa El-Zegheid, coordinator of the NOC’s Oil Crescent emergency committee, said.

At least 45 workers and engineers have returned to their jobs at Ras Lanuf and 35 others at Es Sider, El-Zegheid said. Employees at Es Sider have inspected storage tanks and valves, and the facilities are ready to receive crude from the Waha field, which will slowly increase Waha Oil’s production, he said.

Crude Loadings

Libya has sought to boost crude exports after fighting among rival militias hobbled oil production following the overthrow in 2011 of dictator Moammar Al Qaddafi. The conflict showed signs of calming in recent months, with oil output reaching about 700,000 barrels a day in February from 260,000 a day in August, according to data compiled by Bloomberg. Libya pumped 1.6 million barrels a day before Qaddafi’s ouster.

Waha Oil has an output capacity of more than 300,000 barrels a day, according to the NOC’s website. Its production dropped by half to 40,000 barrels a day after the closing of Es Sider, before it came to a complete halt. Libya has been rescheduling crude loadings at Es Sider and Ras Lanuf and transferring them to other ports such as Zueitina and Brega.

The country split into separately governed regions in 2014, leading to the establishment of competing NOC administrations. A deal meant to reunite the state company under a single management was signed in July 2016. The future of that accord now appears uncertain. The head of the NOC in the east said earlier this month that he was pulling out of the deal because the terms of the agreement, including the transfer of the company’s headquarters to the eastern city of Benghazi, have yet to be met.

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