Libya's state-owned NOC aims to make further progress in rebuilding the country's oil sector next year, buoyed by the rapid recovery in crude production since port and field blockades were lifted three months ago.
NOC has been conducting daily meetings with its subsidiaries since 22 December to discuss both the outlook for oil production and plans to revive the country's embattled refining sector.
Libyan crude output has rebounded quickly since the blockades began to be lifted in late September. The restrictions, imposed by forces affiliated with Khalifa Haftar's Libyan National Army (LNA), drove Libyan crude output down to just 100,000 b/d in February-August, according to Argus estimates. Production had recovered to 1.28mn b/d as of mid-December, according to a Libyan source. Argus pegs Libyan crude exports at 945,000 b/d last month.
Further output growth next year will be driven by NOC subsidiary Waha Oil, whose fields in eastern Libya feed into the country's flagship Es Sider crude grade. Waha Oil can reach over 300,000 b/d of production at the moment. The company expects to add 44,000 b/d next year through development drilling, well maintenance and restarting closed wells. The plan targets 30 wells for maintenance and repair largely in the Gialo field area, a company source said.
NOC is also targeting production growth in the first quarter of 2021 from its Harouge Oil subsidiary, which aims to add roughly 8,000 b/d by restarting the Naqa field. The company has already restarted production from its Amal and Tibesti fields, and has partially resumed output from the al-Ghani field. War damage at al-Ghani in recent years has cost Harouge Oil 45,000 b/d of output, NOC estimates.
NOC has directed its Nafusa Oil subsidiary to secure and maintain wells at the North Hamada field, which has yet to start production. Technical meetings to discuss early production at North Hamada were held in May 2019. Likewise, NOC has instructed its Zueitina Oil subsidiary to study prospective development of three concessions in the eastern Sirte basin.
The oil blockades have encumbered development and maintenance of NOC's assets. They prevented one of NOC's largest subsidiaries, Benghazi-based Agoco, from completing its maintenance and drilling plans this year, although the firm did recently ramp up production from the Sinawin field to 10,000 b/d from 3,000 b/d. NOC plans to set up a Benghazi-based oil centre to help with with equipment procurement, transport and maintenance work.
Downstream push
On the refining side, NOC chairman Mustafa Sanalla said efforts are under way to restart the 220,000 b/d Ras Lanuf refinery. Ras Lanuf is Libya's largest refinery but has remained dormant in recent years amid repairs and arbitration disputes. Libya's second-largest refinery, the 120,000 b/d Zawia facility, came back on line alongside the 300,000 b/d El Sharara oil field in the fourth quarter. Libya has long struggled with fuel shortages caused by constrained refining capacity, as well as power outages that compounded civil unrest over the summer.
NOC's ambitious upstream and downstream objectives come against a backdrop of ongoing political instability, which continues to curb investment appetite among foreign companies. A UN-led peace effort to unify Libya's rival political factions hinges on a late-January deadline for the withdrawal of all foreign mercenary and military troops from the country. NOC has also had to contend with an attempted armed attack at its Tripoli headquarters in recent weeks, alongside threats against officials at its Brega Petroleum Marketing subsidiary.
