A Review of the Nigerian Energy Industry

Libya oilfields ‘to restart soon’

29 August 2011, Sweetcrude, Tripoli – As rebels secured their grip on Libya after effectively gaining control of the capital Tripoli, production from two oilfields in the eastern part of the country could restart as early as mid-September with oil and gas exports to Europe also set to get back online soon.

Arabian Gulf Oil Company (AGOCO) spokesman, Abdeljalil Mayuf told Reuters that technical teams will be sent out to the Sarir and Mesla fields deep in the Libyan desert In the first week of September once the Muslim holy month of Ramadan ends.

“Operations will start on 15 September and by the end of the month we will have the capability to export from Tobruk,” he said.

Initial production will be at about 60,000 to 100,000 barrels per day and any further increase would depend on the condition of underground wells, he said. Some of this oil will be used to feed AGOCO refineries in east Libya once they restart, he added.

The oilfields in eastern Libya were damaged by troops loyal to deposed leader Muammar Gaddafi during the country’s civil war, killing 14 oil workers.

The damage has now been repaired, AGOCO said, while rebel officials said they have set up a special security force to protect oil infrastructure from saboteurs.

About 80% of Libyan oilfields are in the east of the country around the Sirte basin, with rebel fighters now in control of key oil ports Brega and Ras Lanuf.

Oil production in the OPEC country has been at a virtual standstill for months as clashes between rebels and troops loyal to Gaddafi have damaged infrastructure and caused foreign workers to flee.

This has forced global economies to pay more than $100 a barrel for Brent crude since the civil war began in February and driven up import costs for major buyers like Italy, Germany and France.

AGOCO has a total production capacity of about 420,000 barrels per day, or about a quarter of the country’s total output before the war began.

Mayuf did not say if former supply contracts negotiated before the war would be respected.

A natural gas pipeline from Libya to Italy has also been repaired, paving the way for resumed shipments, rebel military spokesman Ahmed Bani said on Sunday.

“The gas pipeline is back and running, supplying the pump stations and the Mellitah (gas processing) refinery. Gas will start flowing to Europe,” Bani said, without giving a timeframe for resumed shipments to Europe.

The 510-kilometre GreenStream BV undersea pipeline system between Mellitah, just west of the Libyan capital Tripoli, and Gela in Italy is 50% owned by Italian oil company Eni.

The pipeline, which supplied about 10% of Italy’s imports in 2010, was shut down in February shortly after the start of an uprising against Gaddafi.

Bani said the closure had resulted in the loss of about €1 million ($1.44 million) per day worth of gas.
Resuming those exports would be a boon for the rebels’ National Transitional Council (NTC), which needs cash to impose security, pay salaries, and restart basic services in the parts of Libya no longer controlled by Gaddafi.

Rebels are reportedly now advancing on Sirte, one of the last pro-Gaddafi strongholds and the Libyan leader’s birthplace.

Gaddafi, whose whereabouts are unknown though he is said to still be in Libya, has said he is willing to start talks for a transfer of power that would be led by his son Saadi.
However, an NTC official said that they did not know where Gaddafi was and no negotiations were taking place with him.

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