Libya's oil production triples after partial lifting of the blockade
Oil production has tripled in Libya in the last week due to the partial lifting of the blockade on energy facilities by Marshal Khalifa Haftar. These facilities are generating 250,000 barrels per day since last week, Bloomberg news agency reported on Monday. The fields that feed the three export terminals in the east, Hariga, Brega and Zuerina, have added some 150,000 barrels per day of new production, according to sources consulted by Bloomberg who ask for anonymity because they are not authorised to speak to the media.
"Production will increase even more as the ships dock and load the crude into the storage tanks, which will allow the fields to pump more," the sources assured this Sunday. The Libyan National Petroleum Corporation, the state-run company, is assessing the security of four Libyan onshore oil ports, including Zawiya, which handles Sharara oil, the nation's largest field, to see if it is safe to start up. This North African country, which is an OPEC member, produced 1.2 million barrels a day last year.
On 18 September the Libyan National Army (LNA), led by Khalifa Haftar and dominating the east of the country, stated that it had reached an agreement to resume oil production with the National Accord Government (NAC), which dominates the western part of the nation. This agreement was negotiated by Deputy Prime Minister Ahmed Maiteeq, who represents the city of Misrata.
On 21 August both parties in the country agreed to a ceasefire and set elections for March 2021. Fayez Sarraj, leader of the ANG, announced that he would resign at the end of October to allow the formation of a new executive. Libya has plunged into chaos following the assassination of Muammar al-Qadhafi. The LNA and the NAG are currently fighting over the whole of Libyan territory, though in recent weeks they have been making progress towards an agreed solution to the conflict. Instability has led the country to become an important transit point for immigrants who want to reach Europe.
The investment bank Goldman Sachs expects production to recover to 550,000 barrels per day by the end of the year. Analysts at Bloomberg Intelligence see production reaching one million barrels per day in the fourth quarter, putting further pressure on oil prices already hit by the coronavirus pandemic. Despite this, experts point out that previous agreements to reopen the oil industry have failed.
But recovery from the historic fall caused by the virus pandemic is faltering, and both the OPEC and its allies and Russia are relaxing the self-imposed limits on production. Libya is exempt from these OPEC limits because of its struggles. However, the amount of extra oil the country can export will depend on how quickly it can fix the wellheads, pipelines and storage tanks that have been neglected or damaged during the conflict.
