War damage to slow return of Libyan oil – IEA

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Restoration of Libyan oil production is progressing far faster than anticipated, the IEA said but a full return to pre-conflict output levels is unlikely until well into 2013.

The International Energy Agency said it expects Libya to produce around 1.17 million barrels per day (bpd) by the end of next year, well below the 1.6 million bpd seen before the uprising and overthrow of former dictator Muammar Gaddafi.

The IEA assessment is in stark contrast to official Libyan estimates, which suggest oil output levels could be fully restored by June next year, Reuters reports.

Acting Libyan Prime Minister Ali Tarhouni said on Thursday output would easily exceed 700,000 bpd by the end of this year.

But the IEA, which advises more than two dozen industrialised countries on energy policy, said it expected output to resume more slowly and estimated total current oil production from the country at around 530,000 bpd.

The agency said heavy damage to oil export terminals and other oil facilities would hold up recovery and many of the necessary repairs would have to be undertaken by foreign specialists working for the international oil companies.
“The bulk of the restoration of production has been carried by local petroleum industry staff, with much of the foreign workforce still outside the country,” the IEA’s monthly Oil Market Report said.

It said production from some oilfields in Libya’s main oil producing Sirte basin, such as Waha, could be limited by heavy damage to the key oil export terminal at Es Sider, which it said officials believed could take a year to repair.

The IEA said no oil was now being produced from Waha, the single biggest oilfield in Libya which previously pumped around 400,000 bpd.

Production flows from the Amal oilfield, which serves as a gathering centre for smaller fields in the eastern Sirte basin, could also be curbed due to extensive damage at the Ras Lanuf export terminal, including key infrastructure such as storage tanks and control rooms, it said.

However, the IEA said the worst fears of retribution killings and attacks of oil infrastructure had not been realised and so far oil exports had progressed more smoothly than anticipated.



Although much of the initial oil being produced in Libya was going to domestic refineries, the IEA said oil exports in November could be between 200,000 and 250,000 bpd.
“Libyan officials have made a herculean effort to restore upstream operations,” the report said.