No change in status for Libyan oil production, OMV says

Libya is exempt from an OPEC effort to balance the market through production declines because of lingering national security challenges.
By Daniel J. Graeber  |  Sept. 1, 2017 at 6:20 AM
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Sept. 1 (UPI) -- There's been no change in the Libyan production status since conflict sidelined hundreds of thousands of barrels of oil capacity, Austria's OMV said Friday.

Contacted by UPI on Friday, the company through a spokesperson said there is no change to the status of its operations in Libya. The Austrian energy company said production from some of its operations in Libya were offline and deferred the status to Libya's National Oil Corp., which OMV said was working to "sort this out."

"There is no need for OMV to change the guidance of an average production in Libya of 20,000 barrels per day for 2017," the spokesperson said.

Libya's NOC said earlier this week that more than 360,000 barrels of oil production per day where shut in by militant activity in the west of the country. The company estimated the loss was around $160 million and it represented about 30 percent of its total capacity.

NOC Chairman Mustafa Sanalla said a militia calling itself the Rayayina Patrols Brigade shut down some of the pipelines tied to the Sharara oil field, Libya's largest.

A worker protest led to a halt in production from the Sharara field in August. Libya holds, by OMV's estimate, around 47 billion barrels of oil. Onshore areas are considered mature, though OMV said that's where it's positioned best. Conflict in Libya has limited production, though the company said the country remains an attractive place to do business.

Libya is exempt from an arrangement organized by the Organization of Petroleum Exporting Countries to limit production in an effort to balance an over-supplied market because it needs the revenue to support national security efforts. The situation in Libya has improved and the country has shown the ability to recover from disruptions in oil production quicker than in the past.

"We must work together to build a stable society where the interests of all are respected, or the future will be very bleak for all of us," Sanalla said in a statement.

U.N. special envoy to Libya Ghassan Salame told the Security Council earlier this week that the security situation in parts of the country like Tripoli had improved and oil production was resilient enough for government authorities to work on a new budget with the Central Bank of Libya. Salame said his travel throughout Libya, however, was still restricted and citizens there were frustrated.

"Libyans cannot understand being poor in a country rich with natural resources," he said.

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