Libya’s yo-yoing oil industry soon will enter a fourth post-revolution phase promising growth in oil production and related support for an essential condition: stability.
In a research note, Arab Petroleum Investments Corp. (APICORP) points out that Libyan production nearly doubled between July and October to 1.28 million b/d, approaching the 1.6 million b/d level from which output plunged after the revolution of 2011.
Production recovered to about 1.4 million b/d the following year but plummeted again in mid-2013.
With the latter slump, Libyan oil production began its politically turbulent second phase, when breakaway factions coalesced into a government based in Tobruk to rival the General National Congress in Tripoli, export terminals closed, and militancy disrupted oil and gas operations.
The ongoing third phase began in September 2016, APICORP says, when National Oil Corp. regained control of the Sirte basin, terminals reopened, and oil production began to rise.
Despite further disruptions, production mostly has risen since then.
During the current phase, non-Libyan operators and service firms have resumed work or announced plans to do so. Drilling is increasing.
According to APICORP, gas projects worth a total $3 billion recently have been commissioned, and oil and gas projects worth $350 million are planned.
But projects worth $4.5 billion originally due completion during 2011-17 were canceled. And projects worth $16 billion have been awarded since 2008 but put on hold, including the $3-billion renovation of the Marsa LNG project, the $5-billion Zuwarah refinery, and the $2.5-billion Wafa field development.
If sustained, APICORP says, higher oil production will create “a virtuous circle, allowing for more funding of the oil sector to replace facilities and therefore expand capacity.”
Stabilization of the country would help NOC meet its production target of 2 million b/d by 2022 and create “another virtuous circle,” APICORP says, “allowing greater oil income not only to sustain NOC’s expansion plans but to support much-needed investment in the nonoil economy and improvements in social infrastructure.”
(From the subscription area of www.ogj.com, posted Nov. 21, 2018. To comment, join the
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