Libya reviews oil production stimulus with Norway's Statoil

Libya's National Oil Co. resolved issues last week with German energy company Wintershall.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |   June 20, 2017 at 8:44 AM
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June 20 (UPI) -- After resolving issues with German energy company Wintershall, Libya's state oil company said it reviewed raising production during talks with Norway's Statoil.

The Libyan National Oil Co. signed an agreement last week with Wintershall that outlines a resumption of oil production from some of its license areas on an interim basis. NOC Chairman Mustafa Sanalla said the agreement gives Wintershall enough of a production share to cover its costs and ends a costly shutdown.

In a Tuesday statement, the NOC said Sanalla met in Tripoli with Fadel Hareeb, a regional manager for Norwegian energy company Statoil. The NOC said its chairman aims to attend a workshop in Norway in September on ways to pull more oil out of its basins using a method known as enhanced oil recovery.

The NOC said the focus of the conversation was on the Sharara oil field in particular, which the company said was producing about 270,000 barrels of oil per day.

Operations at Sharara resumed in April at more than 200,000 barrels per day. The field has operated in fits and starts as Libya tries to push the momentum on the national security front toward the side of peace. It was closed once in April already after restarting just weeks before that.

Libya is a member of the Organization of Petroleum Exporting Countries and is exempt from its multilateral deal to curb production because it relies in part on oil revenue to finance national security objectives.

OPEC economists said in their June market report the recovery in Libyan crude oil production was part of the reason why traders were worried about excess supply on the market.

Secondary sources reporting to OPEC economists said Libya produced an average 730,000 barrels per day in May, an increase of 32 percent from the previous month. Sanalla said the total production rate could hit 1 million barrels per day by July.

Enhanced oil recovery involves techniques ranging from gas and chemical injections to thermal processes to stimulate production. Statoil is a minority partner at the Sharara field.

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