Libya's Sharara oilfield resumes production after pipeline blockade lifted

TRIPOLI (Reuters) - Production at the major Libyan oilfield of Sharara reached 58,000 barrels on Wednesday as operations gradually resumed after the lifting of a two-year pipeline blockade, the National Oil Corporation (NOC) said.

A general view of the El Sharara oilfield, Libya December 3, 2014. REUTERS/Ismail Zitouny/File Photo

The NOC hopes to be able to add 270,000 barrels per day (bpd) to national output over the next three months after announcing on Tuesday that pipelines leading from Sharara and a nearby field, El Feel, had been reopened.

“The NOC gave instructions to operating companies to restart production from the fields and to carry out the necessary testing and maintenance works,” the NOC said in a statement on Wednesday. “Production at Sharara reached 58,000 on the first day.”

In a video published on social media on Wednesday, workers at Sharara could be seen shouting in celebration as gas flares were relit.

The NOC did not give details on the status of El Feel, but an engineer at the field told Reuters earlier that workers there were ready to resume production.

The production capacity of Sharara is about 330,000 bpd, and El Feel around 90,000 bpd, according to the NOC.

Sharara had been closed since November 2014 and El Feel since April 2015 because of the pipeline blockade. Production at the fields has also been blocked in the past by local armed factions loyal to rival Libyan alliances, and it is not clear what commitments have been secured from armed groups to allow oil to be pumped again.

Last week, after a faction of Libya’s Petroleum Facilities Guard (PFG) announced a deal to reopen the pipelines, officials at El Feel said a separate group of guards, from the Tebu ethnic group, were preventing a restart there.

Any speedy recovery in Libyan output could slow the Organization of the Petroleum Exporting Countries’ (OPEC) efforts to bolster oil prices by cutting global supply. Libya and Nigeria were exempted from a recent OPEC pledge to reduce oil production by around 1.8 million bpd.

But Libyan production increases could still be reversed or disrupted by political and armed disputes that continue to plague the North African country five years after the uprising that toppled Muammar Gaddafi.

National output recently doubled to 600,000 bpd, when forces loyal to eastern commander Khalifa Haftar took control of several ports in Libya’s eastern Oil Crescent from a rival faction and allowed the NOC to reopen them. This week a tanker has been loading oil at the biggest of those ports, Es Sider, the first loading in more than two years.

However, national production remains far below the more than 1.6 million bpd Libya was producing before 2011, and much infrastructure is in need of maintenance or repair.

Sharara is run by the NOC, Repsol, Total, OMV and Statoil. El Feel is operated by the NOC and ENI.

Reporting by Ahmed Elumami; Writing by Aidan Lewis; Editing by Greg Mahlich and Jane Merriman