Libya oil output exceeds 1 mil b/d after bank crisis resolution: sources

Libyan crude output has ramped up to over 1 million b/d, although several key fields remained well below full capacity, sources said Oct. 7, just days after a central bank crisis and related oil shutdown was brought to an end.

The current output represents 83% of Libya's full production capacity of around 1.2 million b/d and a significant rebound from the 750,000 b/d of closures that began in late August after the country’s eastern political faction ordered fields, ports and installations to close.

Libya’s crude exports hit 1.2 million barrels on Oct. 6, according to S&P Global Commodities at Sea data, but it was still too early to say whether a full return to the market was at hand, as volumes tend to fluctuate day-to-day. CAS data showed exports at 485,000 b/d in the week started Sept. 30, in line with figures seen throughout the crisis.

The country’s largest field -- Sharara, which has the capacity to pump 300,000 b/d and is operated by a joint venture between Libya’s National Oil Corp. and a clutch of international oil companies -- is producing just 25,000 b/ddue to ongoing maintenance, sources said on condition of anonymity. Repsol and TotalEnergies, key JV partners in Sharara, could not immediately be reached for comment.

Output of Es Sider, Libya’s principal export grade, was still languishing at 146,000 b/d on Oct. 6 at roughly half capacity due to a pipeline leak, the sources said.

The Arabian Gulf Oil Company, an NOC subsidiary, was producing 185,000 b/d at Sarir and Mesla fields, also below capacity, due to a fault in an associated power station, sources said. The fields accounted for most of Agoco’s roughly 279,000 b/d production in 2023. Agoco could not immediately be reached for comment.

Meanwhile, the El-Feel field -- operated by NOC and Italy’s Eni through the Mellitah joint venture -- was pumping close to 90,000 b/d on Oct. 7, at the top end of its capacity. On the other hand, production by Waha Oil Co. rose to 280,000 b/d, sources said, some 20,000 b/d below full capacity.

The shutdown came in response to efforts by the western government in Tripoli to replace central bank governor Siddiq al-Kabir, and it officially ended on Oct. 3, when Naji Essa, a former advisor to Kabir, was confirmed as the new central bank governor.

Hours after the eastern administration in Benghazi announced the conclusion of the shutdown, the NOC said in a statement that force majeure had been lifted at both El-Feel and Sharara.

The two fields, located in the west of the country, supply light, sweet crude to the Mediterranean and Northwest Europe.

Libya has been engulfed by political crises since the fall of Muammar Qadhafi in 2011 in a NATO-backed uprising. Since 2014, two separate governments have been running the country, with one in Tripoli and the other in Benghazi, which is dominated by eastern warlord Khalifa Haftar.

Key political actors and militia retain the ability to shut down oil production, while the powerful central bank is tasked with receiving and distributing Libyan oil revenues, which underpin 93% of government spending.