Libya's rival sides say oil production could restart soon, but political stalemate remains

Production from shuttered fields in Libya will resume "in the coming days," the country's oil and gas ministry said April 24, despite continued demands from protestors that the government resign.

Libya has lost more than 500,000 b/d of crude production – roughly half of its March output – due to field and port shut-ins that have forced state-owned National Oil Corp. to declare force majeure on exports from several oil terminals.

The North African producer pumped 1.07 million b/d of crude in March, according to the latest Platts OPEC+ survey by S&P Global Commodity Insights.

Analysts say production is likely to remain unstable, while Prime Minister Abdul Hamid Dbeibeh's Government of National Unity attempts to hold onto power in the face of rival groups that have called for Fathi Bashagha's Government of National Stability, elected by Libya's eastern-based House of Representatives in February, to be the rightful administration.

The 70,000 b/d El-Feel, or Elephant, field went on force majeure on April 17, followed a day later by the nearby 300,000 b/d Sharara field.

The Zueitina and Brega ports in the east also have been shuttered, impacting about 150,000 b/d of recent exports, with force majeure declared.

"Risks are rising that disruptions could spread to the rest of Libya's onshore production, which includes 575,000 b/d of exports from the Hariga, Es Sider and Ras Lanuf terminals," analyst with S&P Global Commodities Insights said in a note. "Libyan disruptions are often short lived, but the escalating political standoff appears particularly ominous because no widely accepted government is likely to emerge while the civil war persists."

Oil and gas minister Mohamed Oun – a member of Dbeibeh's cabinet -- held a meeting with a committee of tribal leaders in the Oil Crescent producing region in the east to reach a final agreement to end the recent closures, the ministry said in a statement, adding that oil production would be restored within days.

Bashagha also has met with tribal leaders in the Oil Crescent and toured the Zueitina oil port in recent days., where he said he was working to establish "transparent" accounting mechanisms for oil revenues – a key complaint of local groups who say they have not benefited from the proceeds of Libya's energy sales.

"Both GNS PM-designate Fathi Bashagha and the GNU oil minister are competing to take credit for a resumption of production," said Iliasse Sdiqui, associate director at Whispering Bell, a risk management company covering North Africa, adding that the outlook for Libya's hydrocarbon sector "will remain sporadic."