Libya Oil Boss Sees Output Gain With Hope of BP Pumping Soon
Libya boosted crude production by a third after restarting its biggest field, and its top oil official sees further gains when companies like BP Plc invest and start pumping in the politically divided OPEC nation.
The Sharara field in southern Libya is currently producing 260,000 barrels a day, and the state-run National Oil Corp. is working to raise output, NOC Chairman Mustafa Sanalla told Bloomberg Television in an interview. Sharara resumed pumping oil earlier in March after the end of a three-month occupation by armed groups.
“Three weeks ago, production was around 900,000 barrels a day. Now we’re in the range of 1.2 million barrels a day,” Sanalla said. “Unfortunately, we have many oil fields that are outdated and did not undergo any rehabilitation in a long time.”
Libya, with Africa’s largest reserves, has endured major disruptions to its output and exports as battles and blockades among rival armed groups and militias hindered efforts to revive production. The country pumped about 1.1 million barrels a day last year, the highest since 2012, but still only about two-thirds of its output before a 2011 civil war.
Oil has rallied this year as the Organization of Petroleum Exporting Countries and allies worked to curb output by 1.2 million barrels a day in the first half of 2019 to avert a supply glut. Libya was exempt from the cuts because of its internal turmoil. Benchmark Brent crude was trading 8 cents higher at $67.62 a barrel at 9:16 a.m. in Dubai.
The country has many fields needing maintenance, and the NOC wants to replace and upgrade pipelines, storage tanks and other installations, Sanalla said in the interview in Baku, Azerbaijan. However, the NOC needs funds and better security to increase capacity, he said.
“We don’t expect to have so much money from the government. That’s why we are focusing on our partners.”
Sanalla expressed hope that BP would start production “very soon” in western Libya near the Algerian border. “The situation in that area, the Ghadamis basin, is safe, with no security problems.” The NOC also anticipates investment from European companies Eni SpA, Total SA, Repsol SA and OMV AG, he said.
Many wells at Sharara were damaged by sabotage after the field was closed in December, Sanalla said. The NOC is developing its own security plan for Sharara, building protective sand berms and installing surveillance cameras, and its staff are working to boost production at the field to 315,000 barrels day, he said.