Libya: big problems to resume oil production. Or militias or bad weather
Libya's National Oil Corporation (NOC) has lifted its force majeure case on crude oil exports from its western ports after militias ended a three-week blockade, but the offer from the country is struggling to take off due to the closure of ports in the east due to bad weather conditions and lack of storage tanks in the terminals.
Libyan crude oil production plummeted earlier this month to below 800,000 barrels per day (bpd), due to the blockade of four oil fields, including the country's largest, Sharara, and related export terminals in the west, and an urgent repair of an oil pipeline that reduced exports by 200,000 bpd for several days.
On December 20, Libya declared force majeure to stop oil exports after crude oil production was halted from four Libyan oil fields, including the largest 300,000 bpd El Sharara field. Other closed oil fields include El Feel, Wafa and Hamada. The oil fields have been closed by members of the Petroleum Facilities Guard (PFG), which is tasked with protecting the oil fields. The PFG closed a valve on a pipeline from Sharara to the port of Zawiya and another valve from Wafa to Mellita.
Libya's oil production reached 998,000 barrels a day on Monday, a source told the NOC in Argus. According to Bloomberg sources, production in the OPEC member exempted from OPEC + cuts was reported to 1 million barrels per day on Monday.
However, just as Libya partially recovered its oil production after pipeline repairs were completed, bad weather forced the closure of four oil export terminals to the east. This is a sign that Libya's crude exports in January will be much lower than in November, the last month of relatively stable and normal operations in its oil fields and ports.
On Monday, all oil ports in Libya handling crude oil cargoes were closed, while only Ras Lanuf in the east resumed operations on Tuesday, but weather conditions are expected to be bad throughout this week. Storage at the terminals is currently limited in time. So the only solution is to slow down production.
Waha Oil Company was forced to cut production by about 50,000 barrels per day due to lack of storage at the Es Sider terminal, the NOC said, adding that if bad weather persists, the reduction could reach 105,000 barrels per day. . So the relief for oil prices will not come from Tripoli, at least for a few more weeks, even if it is possible that the Libyan recovery, together with the Venezuelan one, could reduce tensions on oil prices starting from the spring.
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The article Libya: big problems to resume oil production. Either militias or bad weather comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/libia-grossi-problemi-a-riprendere-la-produzione-di-petrolio-o-milizie-o-maltempo/ on Fri, 14 Jan 2022 05:49:28 +0000.