With terminals open, trouble in Libya shifts to oil field

Feb. 4, 2019
Just when an oil-production breakthrough began to seem possible in beleaguered Libya, trouble shifted from terminals to oil fields.

Just when an oil-production breakthrough began to seem possible in beleaguered Libya, trouble shifted from terminals to oil fields.

During 2013-16, after production had mostly recovered from the country’s 2011 civil war, militancy closed ports vital to Sirte basin fields. Oil output fell from 1.4 million b/d to as low as 200,000 b/d, averaging 390,000 b/d over the period.

Production recovered when the National Oil Corp. regained control of the terminals last June, reaching 1.28 million b/d in October.

With Libyan governance split geographically, though, security remains tenuous.

The Government of National Accord (GNA), recognized by the United Nations, dominates western Libya from Tripoli.

A rival government controls Libya’s east, led by Abdullah al-Thinni from Bayda and including the House of Representatives in Tobruq.

Al-Thinni relies for security on Khalifa Haftar, a general under former leader Moammar Qaddafi who has emerged as a power broker.

After nearly a doubling of oil production between July and October last year, the Arab Petroleum Investments Corp. wrote that growth beyond 1.4 million b/d by 2020 was “plausible” if stability lasted in view of renewed but cautious investment by foreign operators and service providers (OGJ, Dec. 3, 2018, p. 72).

But in December, militants struck again, this time in El Sharara oil field in southwestern Libya, shutting in 300,000 b/d of production.

Haftar’s Libyan National Army (LNA) this month began a campaign to secure El Sharara facilities.

Success of the operation, says Verisk Maplecroft North African Analyst Hamish Kinnear, would “hugely” strengthen Haftar’s control over Libyan resources. “This, in turn, would shore up Haftar’s bargaining position in ongoing negotiations with the [GNA].”

Partly because the LNA must rely on local alliances with southern militias, however, success won’t happen quickly.

And to sustain El Sharara production, the LNA would need support from southern groups that include the Fezzan Anger Movement, protests of which preceded last December’s takeover of the field.

For LNA, Kinnear says, “diplomatic abilities will prove to be just as important as their military strength.”

(From the subscription area of www.ogj.com, posted Jan. 25, 2019. To comment, join the Commentary channel at www.ogj.com/oilandgascommunity).