Libya reopens oil fields after central bank crisis resolved
The opening of oil wells could pave the way for OPEC to increase hydrocarbon production
Libya's oil production has been repeatedly disrupted in the chaotic decade since 2014, when the country was divided between two rival authorities in the east and west following the NATO-backed uprising that toppled long-time ruler Muammar Gaddafi in 2011.
Libya's eastern-based government and Tripoli-based National Oil Corp (NOC) announced on Thursday the reopening of all oilfields and export terminals after a dispute over the running of the central bank was resolved.
The NOC said in a statement that it had lifted force majeure on all oilfields and terminals as of October 3.
‘We have recently received a formal security assessment relating to Sharara, El Feel and Essider, which confirms that NOC can resume operations and export to its customers,’ it said in the statement. It added that chief Farhat Bengdara met with the central bank's new governor, Naji Issa, and discussed a mechanism for the bank to finance projects to increase production to maintain financial sustainability and ‘offset the revenue shortfall resulting from the shutdowns and the fall in oil prices’.
Libya was producing around 1.2 million barrels of oil per day before production at the Sharara, El Feel and Essider fields was halted in late August and early September. Most of it was exported. In September, exports averaged 460,000 bpd, according to oil analysis firm Kpler.
NOC declared force majeure on 7 August at the Sharara field - one of Libya's largest production areas, with a capacity of about 300,000 bpd - and at the Elfeel field on 2 September.
Sharara is located in southwest Libya and is operated by a NOC joint venture with Spain's Repsol, France's TotalEnergies, Austria's OMV and Norway's Equinor.
Elfeel has a capacity of 70,000 barrels per day and is operated by Mellitah Oil and Gas, a joint venture of NOC and Italy's Eni.
Two engineers at the field told Reuters that the field resumed production, but not at full capacity due to maintenance work.
Earlier, three engineers said there were some ‘technical problems’ at Elfeel.
The government in Benghazi, in the east of the country, said oil production and exports would resume as normal, after rival authorities agreed last month to appoint Issa as the new central bank governor.
Authorities in the second-largest city had shut down oil fields and halted most crude exports on 26 August in protest at the decision by the Tripoli-based presidential council to replace veteran central bank chief Sadiq ElKaber.
Presidential Council head Mohamed al-Menfi met with Issa on Wednesday and stressed ‘the need for the central bank governor to commit to the technical function of the bank, stay away from politics and not overstep the legal powers of the board of directors’. The United Nations Support Mission in Libya (UNSMIL) welcomed in a statement that the NOC announced the lifting of the force majeure on oil production.
The mission stressed that ‘it is essential that revenues from this vital resource are channelled through the appropriate institutional framework and ultimately to the Central Bank of Libya’.
