Libya Says Total Mulls More Investment in Nation’s Oil Fields
(Bloomberg) -- France’s Total SE is in talks to increase energy investment in Libya, where oil output has surged in the past two months amid a truce in the OPEC member’s civil war.
Total and Libya’s state-run National Oil Corp. held a virtual meeting and discussed efforts to increase Libyan production capacity and output “to the highest levels,” the NOC said Thursday. Daily output has already recovered to 1.25 million barrels, it said in a statement, the same amount Libya was producing before it collapsed into political chaos and civil war almost a decade ago.
The speedy resurgence in Libyan oil flows -- it was producing less than 100,000 barrels a day in early September -- has surprised oil traders and exceeded analysts’ forecasts. Strife between rival military forces caused a near-total halt in its energy industry in January.
“The NOC and its companies, even during the shutdown, have not and will not stop working hard,” NOC Chairman Mustafa Sanalla said. “This explains the rapid return to previous production rates.”
Total has been active in Libya for decades and holds shares in key oil fields, including the nation’s biggest -- Sharara -- and the offshore Al Jurf deposit. The Paris-based company also has a share in the Mabruk field, which has been closed for years because of the political upheaval.
The North African country was producing 1.6 million barrels a day before a 2011 uprising toppled long-time dictator Muammar Qaddafi and led to civil war. Oil facilities have been caught up in the conflict, making Libya -- home to the continent’s largest crude reserves -- an uncommonly volatile producer.
The nation was producing about 1.2 million barrels a day before Khalifa Haftar, a Russian-backed commander based in eastern Libya, blockaded ports and fields in January. Haftar, who was battling the United Nations-recognized government of Prime Minister Fayez Al-Sarraj, lifted his blockade in September after winding down hostilities amid a truce.
Libya’s recovery is weighing on oil prices at a time when the coronavirus is sapping energy demand. At the same time, analysts and traders question whether the revival will last and if the truce can hold.
In what could be a big step toward stabilizing Libyan oil output and exports, Sanalla traveled to the eastern port of Brega this week to meet with the two main warring factions and discuss unifying the Petroleum Facilities Guard. The Guard was formed as a neutral force to defend oil ports and fields, but its members contributed to a crash in output in recent years by blockading installations on behalf of various groups and to press their own demands.
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