Libya's crude output down 70pc in a week

Market: Crude oil
02/09/24

Libya's crude output has fallen by nearly 70pc, Argus estimates, in the week since the country's eastern-based government ordered an oil blockade in response to an attempt to replace the central bank governor.

Argus estimates Libya's current production at around 300,000 b/d, based on official documents and shipping sources. This is down from 960,000 b/d on 26 August when the oil blockade was announced. Output was 1.2mn-1.25mn b/d in early August, before the Repsol-led El Sharara field was forcibly shut down by the Libyan National Army (LNA).

State-owned NOC today declared force majeure production from the 70,000 b/d El Feel field. Crude from the field, which is near El Sharara, is exported through the Mellitah terminal, 100km west of Tripoli. Italy's Eni, which operates the field alongside state-owned NOC, confirmed El Feel's closure to Argus last week.

The biggest effect from the latest shutdowns is being felt in the oil heartland Sirte basin, from where crude is exported through the eastern export terminals at Es Sider, Ras Lanuf, Zueitina, Marsa el Hariga and Marsa el Brega. The region's oil facilities are effectively controlled by the LNA, which props up the eastern-based government in Benghazi.

These five terminals exported 728,000 b/d of crude in the three months to August, out of a country total of 1.04mn b/d, according to Kpler. But there have been no exports from any of the five since 30 August, when a 500,000 bl cargo left Ras Lanuf.

Libya's output may fall further as storage tanks are filled, although production is unlikely to hit zero. Some output will probably remain online to supply domestic refineries, as will some gas-linked oil production that supplies power plants. Most production in the country's west, which is nominally controlled by the internationally-recognised administration in Tripoli, is likely to continue. This includes the Eni-led 25,000 b/d Bouri and the TotalEnergies-led 20,000 b/d Al Jurf offshore fields, and Eni's Wafa wet gas field on the Algeria border that produces crude and condensate.

The latest shutdowns were sparked by a Tripoli-based presidential council attempt on 18 August to replace long-standing central bank governor Sadiq al-Kabir. The presidential council has since installed an interim governor and board which on 2 September said the bank's operations had returned to normal.

But al-Kabir and the eastern-based administration have refused to recognise the legitimacy of the new board. Analysts say the crisis could degrade Libya's ability to carry out international financial transactions and worsen a domestic shortfall of banknotes. Libya's oil export revenues usually flow into the central bank, making it one of the country's most powerful institutions.

By Aydin Calik

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