Confusion Clouds Libya’s Oil Output Amid UN Push to End Crisis
Libya’s exact oil output was clouded in uncertainty, with three fields ordered to gradually resume pumping even as production at a major site was slashed further amid a feud between the OPEC nation’s rival governments.
The Sarir field, which has a capacity of 145,000 barrels a day, has already restarted, while the Messla and Nafoura facilities got similar instructions, according to people with direct knowledge of the situation who asked not to be identified as the information isn’t public.
The operator, Arabian Gulf Oil Co., didn’t explain its directive, but the resumption is likely to supply local refineries and power plants rather than for export, the people said. Meanwhile, production from Waha Oil Co. kept dropping to 96,200 barrels a day from its normal level of 320,000, according to another person familiar with the matter.
The moves come as Libya’s competing eastern and western governments are locked in a standoff over the leadership of the central bank, the custodian of billions of dollars of energy revenue. The country’s daily oil output fell by more than half in the past week to about 450,000 barrels, after eastern authorities ordered a shutdown in response to a decision by the internationally recognized western government based in the capital, Tripoli, to replace Governor Sadiq Al-Kabir.
Libya was pumping about 1 million daily barrels before the halt order, with the vast majority of production in the east. A full resumption of the Arabian Gulf Oil Co.’s three fields would return about 300,000 barrels per day of output.
Oil prices in London jumped above $80 a barrel on the day Libya’s eastern government called for a full production halt last week. They’ve slipped since, closing below $79 a barrel on Friday, on concerns over global demand.
Governor Al-Kabir, who’d been locked in a long-running feud with Tripoli-based Prime Minister Abdul Hamid Dbeibah and has allies in Libya’s east, rejected the order to step down, prompting western authorities to take over the bank’s headquarters.
Al-Kabir said in an interview with the Financial Times that he and other central bank staff had fled Libya to “protect our lives” from possible militia attacks. The western government’s new designated leadership has struggled to resume banking operations, whose suspension has piled on yet more problems for the livelihoods of the North African nation’s 6.8 million people.
The United Nations says it’s working with stakeholders to negotiate an end to the confrontation. That might augur a prolonged period of horse trading over appointments to critical management positions in the country that’s home to Africa’s largest proven crude reserves.
