Libya ready to open the taps

Libya

TRIPOLI, December 21, 2016 – Libya’s state-run National Oil Corporation (NOC) on Tuesday said that two major western pipeline systems had been reopened, clearing the way for additional exports.

“I welcome the statement by the Rayayina Patrols Company of the Petroleum Facilities Guard, Western Branch, announcing lifting of the blockade on all the pipelines,” NOC Chairman Mustafa Sanalla said in a statement, referring to the pipeline system between the El Sharara oilfield and the Zaeiya refinery and the lines connecting the El-Feel asset to the Mellitah complex.

The reopening of the pipelines follows the re-start of operations at the mentioned fields last week, and clear the way for increasing Libya’s oil output by 175,000 bopd before the end of this month, according to NOC. The Sharara and El Feel fields have the potential to add 270,000 bopd within three months, it also said. On Sunday, NOC had to pause the fields’ relaunch due to threats from a local militia over payments. Yet, Sanalla said, an arrangement was reached with “no payoffs and no backroom deals.”

If successful, the restart could help Libya achieve production levels of around 845,000 bopd by the end of the first quarter of 2017, up from 575,000 bopd last month. As the country is exempt from OPEC member obligations to reduce output, the added production – potentially close to a quarter of the agreed-up cuts – could complicate the organisation’s efforts to prop up oil prices.

Sharara is operated by a joint venture comprising NOC, Repsol, Total, OMV and Statoil. Production capacity of the field is pegged at 330,000, while El Feel, operated by Eni and NOC, has an output potential of 90,000, the NOC statement continued.