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Libya’s NOC says oil output at three-year high and rising

Libya is pumping 715,000 barrels a day of oil, the most since 2014, and is on track to keep boosting output this year as the country restores much of the production lost amid political chaos and conflict, the state oil company’s chairman said.

Blockades at the North African state’s main oil ports have ended, and output may reach 1.25 million barrels a day by year end of 2017, National Oil Corp. Chairman Mustafa Sanalla said Tuesday at a conference in London. Additional production may create a challenge for Opec and other major suppliers that agreed to pump less crude starting January 1 in an effort to end a global glut.

The restart of El Feel and the expected reopening on Sharara came after the NOC reached an agreement with protesters who had been blocking pipelines that connect the fields with the Zawiya refinery and Mellitah complex, a person with direct knowledge of the matter said, asking not to be identified because the issue isn’t public. Zawiya has received instructions to prepare for the imminent reopening of the fields, the refinery’s Abdullah said.

“Every single major oil-export route is now open, although some are operating at significantly reduced levels due to damage suffered in conflicts,” Sanalla said, according to the text of his speech. “For the moment the oil is flowing. This can be an important foundation of stability in Libya, if we build on it.”

Libya, with Africa’s largest crude reserves, is trying to revive its oil production and exports in spite of continuing political uncertainty. Last month it reopened its biggest oilfield, Sharara. The production figures Sanalla announced represent a 23 per cent increase from the 580,000 barrels a day that Libya pumped in November, according to data compiled by Bloomberg.

Opec exemption

The country pumped 1.6 million barrels a day before a 2011 revolt set off years of fighting between rival governments and militias. The Organisation of Petroleum Exporting Countries exempted Libya from cutting output as the nation works to restore its oil industry.

The Sharara field, operated by Repsol SA, is pumping about 153,000 barrels a day, and NOC is targeting output there of 250,000 barrels a day by May, Sanalla said in an interview in London. The Eni SpA-run El-Feel field remains shut, he said. El-Feel, or Elephant, was also due to reopen in December but guards demanding benefits prevented that, NOC said earlier this month. The two western fields have a combined capacity of 450,000 barrels a day.

Of all the nation’s oil terminals, Es Sider requires the most repairs, Sanalla said. Only five of the terminal’s 19 storage tanks are working, he said in the interview.

Benchmark Brent crude slid 0.2 per cent to $55.32 (Dh203.19) a barrel at 1:04pm in Singapore on Wednesday. It has dropped 2.6 per cent this year.