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Libya: 400,000 b/d of output could be online in a matter of weeks

Libya’s largest oil field Sharara restarted production this weekend, after the 300,000 b/d site was shut-in for almost five months due to an oil blockade, stateowned National Oil Corporation said June 7.

Libyan production of 400,000 b/d could be online soon as the 75,000 b/d El Feel oil field is also likely to open soon, sources said.

NOC said the Sharara field restarted on June 6 beginning at a capacity of 30,000 b/d.

“Production at the field is expected to return to full capacity within 90 days due to the damages resulted by the very long shutdown,” NOC said in a statement.

S&P Global Platts, a provider of energy and commodities information and a source of benchmark price assessments in the physical commodity markets stated that a key pipeline valves which connect the Sharara and El Feel fields with the Zawiya export terminal and refinery reopened on June 5, paving the way for a resumption of crude output.

The restart occurred just as the OPEC+ alliance agreed to extend 9.6 million b/d of production cuts to July, brushing aside Mexico’s defection from the pact and receiving pledges of improved compliance from Iraq, Nigeria, Angola and Kazakhstan

Libya is currently exempted from the historic cuts, and any new production could complicate efforts by the 23-member coalition to rebalance the market.

Libyan crude production was around 70,000-80,000 b/d until a few days ago, less than a tenth of what it was producing before Jan.18 when the LNA orchestrated an oil port blockade. Output was the lowest level since September 2011, when a civil war tore the country apart and led to the downfall of Colonel Moammar Qadhafi.

There is also a concern that GNA’s move eastwards, especially toward the eastern oil crescent where the key oil terminals are located, could pave the way for more conflict and instability.

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