Libya’s crude oil production will rise above 1 million barrels a day in the next four weeks after the nation reopened the last of its oil ports, according to the state energy firm.
The National Oil Corp. said it has lifted force majeure — a clause in contracts allowing deliveries to be suspended — at the eastern ports of Es Sider, Libya’s biggest export terminal, and Ras Lanuf. It’s safe to restart operations after months of shutdowns because foreign fighters involved in the country’s long-running civil war have left the areas, the company said in a statement.
The Al Nafoura and Amal fields, which feed Ras Lanuf and have a combined capacity of around 90,000 barrels a day, have already restarted, people familiar with the matter said.
The rapid resumption of Libya’s crude oil production following a truce has put added pressure on crude prices, just as a resurgence of the coronavirus saps demand for energy.
Warring parties in Libya signed a permanent ceasefire agreement, which should bolster the NOC’s efforts to increase crude oil production output. Representatives of the United Nations-recognized government in Tripoli and eastern military commander Khalifa Haftar — whose forces blockaded most oil fields and ports in January — struck a deal after talks in Geneva.
Libya’s daily crude oil production was less than 100,000 barrels before Haftar lifted his blockade in September 2020. The company won’t be able to pump at last year’s levels of around 1.2 million barrels a day due to damaged infrastructure and budget constraints, it said.
If Libya’s daily output does rise to 1 million barrels as quickly as the NOC says, it will make the task of OPEC+, which is trying to curb supplies and bolster prices, even harder.
Even its worst-case analysis of the market didn’t anticipate such high output from Libya — an OPEC member that’s exempt from the curbs because of its strife.
Also, Rival Libyan military leaders agreed to extend their truce and devise ways to restructure the armed group charged with protecting crude oil production facilities.
Also representatives of Libya’s internationally recognized government in Tripoli and its eastern-based opponents would also reopen land crossings and domestic air travel, without giving details.
Repeated efforts to broker a lasting agreement between Fayez al-Sarraj’s government and eastern commander Khalifa Haftar have faltered.
Restructuring the Petroleum Facilities Guard could be a key step toward ramping up crude output and exports, which have slumped as the two sides fought.
The paramilitary force was initially set up to protect crude oil productioninfrastructure but in a reflection of the country’s deep divisions morphed into a force that has blocked export terminals as Libya’s opponents pushed for an advantage.