Libya’s ‘Elephant,’ Sharara Oil Fields Restart Said Halted

EghtesadOnline: Libyan oil-facility guards prevented two of the country’s biggest fields from resuming production, days after the National Oil Corp. reached an agreement to restart operations there to boost output in the politically divided OPEC state.

News ID: ۷۷۲۴۳۰

19 December 2016

According to Bloomberg, the El Feel, or Elephant, and Sharara fields still aren’t operational after they were shut more than a year and a half ago, an NOC official said Sunday by phone, asking not to be identified for lack of authorization to speak to news media. A group of guards backtracked on their agreement to let oil flow by pipeline from both fields, Khaled Hadloul, an engineer at Mellitah Oil & Gas, which operates Elephant, said by phone.

“It’s not clear when the actual output will start,” Hadloul said. “Negotiations with the guards are ongoing,” and the reasons why the guards reversed their position are unclear, he said. Hadloul said he knew that Repsol SA-operated Sharara, Libya’s largest field, also has yet to restart because both fields in western Libya feed into the same pipeline network. Eni SpA has a stake in Elephant.

Brent crude rose as much as 0.7 percent to $55.58 a barrel on Monday and was trading at $55.32 as of 8:28 a.m. Singapore time.

Militia Groups

The inability of either field to reopen is a setback for the state-run NOC, which reached an agreement with protesters who had been blocking pipelines that connect the deposits with the Zawiya refinery and Mellitah complex, a person with direct knowledge of the matter said last week, asking not to be identified because the issue wasn’t public. The deal spurred hopes for an increase in production from the North African country, following years of turmoil and conflict among militia groups for control of its energy facilities.

A revival in Libyan output would put more pressure on the Organization of Petroleum Exporting Countries and other major producers that agreed over the past three weeks to pump less oil to rein in an oversupply and shore up prices. Libya was exempted from OPEC’s planned cuts because of its internal strife and is currently producing 600,000 barrels a day, less than half of the 1.6 million it pumped before a 2011 uprising.

The oil port of Es Sider shipped 80,000 tons of crude on Friday, Libya’s Lana news agency reported. The overseas cargo was the first to sail from the country’s biggest export terminal in two years.