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Industry watchers cautious on Libyan oil rebound

Some time before Libyan oil sector returns to normal.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   July 9, 2014 at 10:06 AM
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HOUSTON, July 9 (UPI) -- Energy industry watchers said Wednesday optimism over the rebound of Libyan oil production should be tempered.

Forecasts of the potential in Libya's oil sector have waxed and waned since the end of civil war in 2011. The country has yet to pass its pre-war peak of 1.4 million barrels per day and early 2014 output had plummeted to well below 500,000 bpd.

The National Oil Co. said late Tuesday production from the giant El-Sharara field had resumed. It has a capacity for 340,000 bpd, but an unidentified industry source told the Platts energy reporting agency it was too early to declare recovery.

"It was down for a long time," the source said. "It will not be at full capacity for weeks, or even months."

The pipeline connecting the field to export terminals has been blocked off by protests for most of the year.

In April, the Libyan government secured a deal with eastern rebels jockeying for more authority that opened two key oil export terminals. That partially ended an eight-month blockade that curtailed Libya's oil output potential dramatically.

More fields opened last week, prompting acting Prime Minister Abdullah al-Thani said to say his government has effectively solved its "oil crisis."

Eastern export terminals handle about half of Libya's oil export capacity.

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