Libya Doubles Oil Production Since OPEC's Algeria Meeting
Libya's National Oil Corporation spokesman has reported that the country's oil production rose to 670,000 bbl/day this week, up from the 363,000 bbl/day that the country produced when OPEC members representatives met in Algeria the last week of September.
Libya's National Oil Corporation, NOC, is pushing hard to reach its previously set goal of 900,000 bbl/day before the end of the year.
Al-Awami expressed his confidence in the country's ability to quickly raise its output to 1.5m bbl/day if the government approves a proper budget to fund NOC operations. NOC is also working through judicial and political channels to reopen the 2 main fields in the south western region of the country, Al-Sharara (Operated by a JV with Repsol), and Al-Feel (Operated by a JV with Eni). Both fields have a total production capacity of 450,000 bbl/day, and their closure has caused the country a loss of $27B, according the NOC chairman, Mustafa Sanallah.
Libya is resuming production after suffering a 3 year closure of its oil export terminals by the Petroleum Facilities Guards, PFG, over alleged claims of corruption in the oil industry. The Libyan National Army, LNA, seized control over the export terminals in mid-September, and called NOC to resume operations in the area.
This rapid production increase comes in a critical time. OPEC has agreed in September to cap its total production at 32.5m bbl/day, down from 32.24m bbl/day, but since the meeting, both Libya and Nigeria increased production by a total of 700,000 bbl/day, and with 4 weeks to go before the next OPEC meeting, both countries could add more
The ultimate goal of OPEC's deal is to control oil prices. The additional barrels produced by Libya or other countries add more to the supply glut and apply more pressure on oil prices, making a meaningful agreement even more challenging.
OPEC has repeatedly communicated that war-torn Libya and Nigeria, as well s post-sanctions Iran, are to be exempted from the deal, but does this mean a carte blanche for the three countries to add much production as possible? Only time will tell.
