Libyan oil production is creeping upward as more foreign oil companies are making exploratory returns to the country, with the National Oil Company estimating that nationwide production is already at 350,000 barrels per day (bpd).
Germany’s Wintershall is the latest firm to have sent a small group of Libyan workers to a cluster of oil fields, where sites jointly operated by U.S. firm Occidental Petroleum Corp and Canada’s Suncor Energy Inc are also in the process of restarting, reports Reuters. Before the unrest Wintershall was producing around 100,000 bpd in Libya. Wintershall operates in eight onshore oil fields in concessions 96 and 97 in the Libyan Desert about 1,000 kilometers south-east of Tripoli.
Small initial teams are being deployed to evaluate damage and make a start on production, with a return to pre-war production dependant on the willingness of oil workers to return as war damage or logistical bottlenecks. Wintershall currently has a tenth of their pre-war workforce in place, with more to join in the coming weeks: the firm reports no damage to its fields atÂ
Domestic demand will take a sizeable chunk out of exports for now, as the country looks to kick start its downstream sector and get the country running after six months of war.
Spanish firm Repsol says the Sharara field in the South-West of the country could produce 50,000 bpd within around two weeks, according to Dow Jones Newswires, though more time will be needed to ramp up production to pre-war levels of 300,000 bpd.
70,000 bpd of production has come back online at the Nafoora field that Occidental part owns with OMV and others under the operation of NOC subsidiary Agoco. However, Occidental have not as yet put a team on the ground or commented on its intentions.
While many fields have sprung back into life at a pace that belied the predictions of many analysts – see this infographic – resuming production at pre-war levels is set to take at least until Q3 2012, as lingering security fears keep many away. Fields are being patrolled by Libyan security personnel wielding AK-47s left over from the ouster of the Gaddafi regime, but as this weekend’s attack at Rumaila shows, large fields deep in the desert are hard to lock down against determined saboteurs.
There have been positive reports. Eni has denied a Reuters report last week that its (33% owned) 700 million-barrel ‘Elephant’ field lay “in ruins”, saying that while there have been “thefts of communications and transportation equipment” by pro-Gaddafi militias, sustained delays are unlikely.
Bottlenecks at the export end are also looking to ease shortly. Nuri Berruien, Chairman of the Libyan National Oil Company, says the Es Sider terminal, which shipped around a third of Libya’s pre-war crude exports, will be operational in around 10 weeks. Ras Lanuf – the country’s largest refining facility – could restart within a few days, according to Reuters reports, with 300,000 barrels of crude currently stored at site and ready for processing.
On exports, Reuters reports that the Nationa Oil Company shipped its fourth cargo on Friday. 600,000 barrels of Libyan light crude landed at Trieste, Italy, after a joint purchase by OMV and Swiss refiner Petroplus.
Heritage Oil, an American independent, made an optimistic play in the Libyan oil sector last week, bagging a 51% stake in Libya’s Sahara Oil Services Holdings, which holds the necessary long term permits and licences to provide oil field services in Libya, for $19.5 million in cash. In a company statement released last week, the firm admitted it had been in talks over the last 5 months with the NTC about the rehabilitation of the Libyan fields. The firm has also acquired promising 2D seismic for further exploration.
Meanwhile, NTC forces continue their seige on the pro-Gaddafi bastion Sirte, where snipers are continuing their hold-out in the face of NATO strikes and waves of incursions byÂ
