IOCs resume crude oil, natural gas production in Libya

Total SA and Eni SPA said they have resumed production of crude oil in Libya, while state-owned Sirte Oil said it has restarted output from its eastern gas fields.

“We have started producing and sending gas to the power plants of Benghazi and Zuetina,” said a Sirte Oil spokesman, adding, “Soon we won’t have to use diesel anymore.”

The spokesman said gas production has resumed from Hateiba and Assoumoud gas fields in eastern Libya, while Sahl field is now in the process of restarting.

The report coincided with an Eni announcement that it has resumed production in Libya, tapping 15 wells and producing 31,900 b/d of oil at Abu-Attifel field, 300 km south of Benghazi.

Eni said other wells will be reactivated “in the coming days” to reach the “required volumes to fill the pipeline” between the Abu-Attifel field and the port of Zuetina on the Mediterranean.

Operations at Abu-Attifel are being conducted by Mellitah Oil & Gas, a partnership between Eni and Libya's state-run National Oil Corp.

Eni's production could reach 140,000 b/d by the end of November, according to Najmi Karim, chairman of Mellitah Oil & Gas. But he warned that the absence of foreign oil contractors is delaying the country's oil and gas comeback.

“Some [foreign] contractors are having difficulty to mobilize equipment and personnel,” said Karim. For now, he said, they are trying to “assess the security situation.”

That is the view of Repsol-YPF, which said it has not restarted production yet at the fields it operated in Libya and that it does not have guidance on when it could resume.

“Repsol continues to closely monitor events in Libya,” said company spokesman Kristian Rix, who added that Repsol is using Libyans and contractors to assess its infrastructure there.

Earlier, Total said it had restarted production from offshore Al Jurf platform, which the French firm operates in a joint venture with NOC and Wintershall. It said exports should resume in 2 weeks, reaching 40,000 b/d in several weeks’ time.

The International Energy Agency, commenting on the situation in Libya, welcomed the news that oil production has begun once again but said the road back to full operational recovery is likely to be “long and difficult.”

IEA said, “Damage to production facilities, pipelines, refineries, and ports, although believed comparatively light, will need to be fully assessed, and security on the ground assured before major increases in production can be expected.”

“The pace of the restoration of production will also hinge on whether the fields were professionally shut-in or done in a rushed, haphazard manner,” the agency said.

“For now, we have modestly revised up our expectations of Libyan crude production capacity to 350,000-400,000 b/d by [yearend], rising to a total of 1.1 million b/d by the fourth quarter of 2012,” IEA said.

However, the agency also hedged on its estimate, saying that “the projection is predicated on an imminent end to the civil unrest, and assuming that political stability and security on the ground are achieved in the very near term.”

Contact Eric Watkins at hippalus@yahoo.com.

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