Libya Resumes Production At Largest Field Amid Rising Oil Prices

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By Irina Slav, Oilprice.com

Libya’s largest oil field, Sharara, will resume production following a two-week halt, after a pipeline blockade ended yesterday. This is what an unnamed source from Libya’s oil industry told Reuters, with the Sharara to resume output today, according to Bloomberg.

The pipeline that was blocked feeds crude oil from Sharara to the Zawiya export terminal. The armed group responsible for the latest blockade, which began on August 19, was one led by Ashraf Al-Gurj—the leader of an organization from Zintan that calls itself the Reyayna Patrol Brigade. The same group was behind the August shutdown of another two fields as well, El Feel and Hamada. The three shutdowns cost Libya 360,000 bpd in lost output, the National Oil Corporation said at the time.

Al-Gurj’s group claims they are fighting for more investments by NOC in Zintan but according to Libyan media, the more likely reason for the blockades is the release of Al-Gurj’s cousin, who is being held in custody on charges of smuggling.

Sharara produced 280,000 bpd before the August blockade, which was the latest in a string of similar events that had a crippling effect on Libya’s recovering oil output. Before the last shutdown at Sharara, the country was producing around 1.1 million barrels daily. This was still short of pre-2011 levels, when Libya produced about 1.6 million bpd, but on the way to 1.2 million bpd – the daily production figure NOC announced it will be striving for earlier this year.

While oil production recovery has been positive for Libya, it has been a problem for the country’s OPEC partners. When the cartel agreed to take off 1.2 million bpd from global supply, Libya was exempted because of its political and militant group woes. Over time, its rising production began to pressure prices, offsetting the cuts that other OPEC members made.

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