* Oil pumping from big western field restarts
* Protesters in east deny any deal with government
* Any return to full output would take weeks
By Suleiman Al-Khalidi and Julia Payne
TRIPOLI/LONDON, Sept 16 Libya took the first
steps towards restarting some of its oil output on Monday as the
government said a tentative deal with protesters in the
country's west allowed pumping to resume from a major field.
Hopes of a full output resumption from the OPEC producer
remained slim after an attempt at a similar deal with protesters
in the east collapsed, meaning two-thirds of the country's
output would remain shut for the time being.
The government has been locked in talks with feuding tribes,
militia and protester groups over the past two months as output
collapsed to a tenth of Libya's maximum capacity of 1.5 million
barrels per day.
The worst disruption since the 2011 revolution has already
cost Libya and Western companies such as Italy's Eni
and U.S. Marathon billions of dollars in lost revenue
and has contributed to a spike in global prices to a six-month
high during August.
On Monday, one of Libya's key oil fields in the west, El
Sharara, resumed pumping after an armed group agreed to let
valves on the pipeline linking the field to export terminals be
re-opened, a senior Libyan oil official said.
Another major field, El Feel, has not restarted as workers
were going to inspect connecting pipelines.
"El Sharara has opened and crude has reached the terminal.
It's just pumping from the tanks so then we'll slowly turn on
the wells," the official said. "I think (Sharara) should come
back to normal production by Friday."
Libya produces around a third of its output from its western
fields so if El Sharara and El Feel reached full capacity the
country could be exporting 400,000 bpd in addition to the 80,000
bpd Libya has been exporting from offshore fields, which have
not been affected by strikes.
For a factbox on Libyan oil
For a map of facilities follow this link:
TALKS IN THE EAST COLLAPSE
Libyan media reported over the weekend that protesters in
the east have reached a deal to reopen export terminals from
Monday while demanding a number of conditions to be met within
But the spokesman for the protesters denied the reports.
"There is no deal and the port terminals in the east from Es
Sider, Ras Lanuf to Brega and Hariga are closed for exports
until the protesters demands are met. The government has not
responded to our demands," Osama al-Oreibi told Reuters.
Al-Oreibi is the spokesman for the federalists in the
"Brega political office", headed by Ibrahim al Jathran, who is
seeking a bigger role in the oil industry.
Industry executives say stoppages in the west are led mainly
by the powerful Zintan tribe, a major rebel group that has
become influential within government-financed army units and
could be flexing its muscles for a bigger political role.
In the coastal east, demands beyond more pay extend to a
broader political agenda including the sharing of oil revenues
and a bigger self-government role.
Samir Salem Kamal, Libya's representative at the
Organization of the Petroleum Exporting Countries, told Reuters
on Monday it would take weeks for production to climb back to
pre-crisis levels even if strikes ended immediately. Repair and
maintenance work would cost millions of dollars.
"If they open production, we will have to gradually return
back. We are going to face problems for sure. I cannot imagine
in a week or two, hopefully it will be weeks," he said.
Some pipelines and pumping stations will need replacing
because of prolonged stoppages. Adding to the problems could be
the reluctance of European refiners, who buy the bulk of Libyan
oil, to commit to purchasing large volumes next year, he said.
"I expect in 2014 we will face problems in selling our crude
as they would consider Libya an unstable country that cannot
meet its contractual commitments," said Kamal.