Libya's oil output edges higher to 1.25mn b/d: NOC

Libyan oil production has recovered to 1.25mn b/d, around the same level as the country was producing before port and field blockades were imposed in January, state-owned NOC said today.

This is broadly in line with information provided to Argus from a Libyan source earlier this week, who said crude output was 1.2mn b/d . Production has picked up rapidly since a landmark agreement between Libya's warring factions in Tripoli and the east of the country ended the blockades in mid-September. Argus estimates that Libyan crude output averaged just 140,000 b/d in September.

NOC said it held an online meeting with Total yesterday to discuss a potential increase in the French firm's investment in Libya's oil sector, suggesting further scope for output growth in the future. Total holds stakes in Libya's offshore Al Jurf field and the onshore El Sharara field and Waha concessions.

Libya's swift output recovery over the past two months coincides with UN-led efforts to transition the country towards national elections and a unified government. The elections have been pencilled in for December next year following inter-Libyan talks held in Tunis last week.

In a further step towards brokering stability in the oil industry, the UN Support Mission in Libya's (UNSMIL) acting envoy Stephanie Williams accompanied NOC chairman Mustafa Sanalla on a visit to Marsa el-Brega to discuss unifying the eastern and western branches of Libya's Petroleum Facilities Guard (PFG). The PFG was initially set up to protect NOC's assets, but the two branches have had different loyalties in the past, with the eastern branch lending support to Khalifa Haftar's Libyan National Army (LNA) to implement the blockades.

Meanwhile, the revival in Libyan output has raised questions about the country's future obligations under the Opec+ production restraint agreement. Libya is exempt from the current deal in recognition of its volatile security situation since the 2011 civil war.

Saudi Arabia's oil minister Abdulaziz bin Salman was asked about Libya's future participation in the deal during a press briefing ahead of the G20 summit earlier this week. "Once they go back to where they were prior to October [20]18, we will have, then, a discussion," he said.

October 2018 is the baseline from which the majority of Opec+ production cuts are calculated. Argus estimates that Libyan crude output averaged 1.21mn b/d that month. NOC's Sanalla said earlier this month that Libya is unlikely to be able to take on an Opec+ quota until its output stabilises around the 1.7mn b/d mark. The last time Libya's monthly output averaged that level was back in December 2008, according to Argus estimates.

By Ruxandra Iordache

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