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Libyan Economy Strengthens as Oil Production Resume

(Author: Libyan Gazette Editorial Staff)

It has been five years since Libya’s oil industry was operating at full capacity and only recently were Libyans able to reopen the country’s major oil ports to resume oil production and exports.

Before the 2011 uprising, Libya was producing around 1.6 million barrels per day. However, as the violence in the oil rich country escalated, oil fields and ports were shut down as vying militia groups attempted to take possession of the country’s main source of revenue.

The escalating violence put the oil fields and ports under force majeure, which legally prevents a group from being held liable when the situation is out of their hands.

On September 16, German company Wintershall AG pumped oil at As Sarah field’s Concession 96 at a rate of 35,000 barrels per day, said a company official.

The German company is a subsidiary of BASF SE, the world’s largest chemical company and is also in the plastics, agriculture and natural gas industries.

According to the official, the Libyan National Oil Corporation (NOC) gave Wintershall permission to pump oil and said it will send oil to Zueitina port for export.

A signal from another tanker, known as Ionic Anassa, suggests the ship will make it to the Zueitina port on October 3. Ionic Anassa will be the first tanker to load crude from Zueitina after force majeure was lifted earlier this month.

Force majeure for Zueitina oil port, along with Es Sider and Ras Lanuf oil ports, was lifted by the NOC on September 14 when a deal was agreed upon by the state oil company and Haftar, who recently took possession of the ports by force.

Olivier Jakob, managing director at the Swiss company Petromatrix GmbH, said “Libya’s output is showing the first signs of a credible increase.”

Libya is making progress towards reaching the volume of oil production it was exporting before the civil unrest that began in 2011. In an interview earlier this week, the NOC’s head, Mustafa Sanalla, said Libya is now pumping 484,000 barrels per day, which is double what it used to be. Sanalla gave an interview in Algiers where members of the Organization of the Petroleum Exporting Countries (OPEC) will be meeting.

This month, exports resumed at Ras Lanuf, one of the three major oil ports in the country, and near the end of the month Zueitina is expected to load two oil cargoes, said Sanalla.

The recent increase in oil production and exports is boosting Libya’s economy after being badly devastated after the uprising began in 2011.

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