By Ahmad Ghaddar
LONDON, June 19 (Reuters) - Libya's oil production has risen by over 50,000 barrels per day (bpd) to 885,000 bpd after the state oil firm settled a dispute with Germany's Wintershall that had slashed production by some 160,000 bpd, a Libyan oil source told Reuters on Monday.
Last week, the National Oil Corp said it expected OPEC member Libya's production to recover to 900,000 bpd in the short term.
The dispute prompted Wintershall to shut down production at its NC 96 and NC 97 concessions in the Sirte basin, around 1,000 km southeast of the capital Tripoli.
"Through Wintershall facilities we can pump the production of other producers like ENI and other operators," the source said, declining to be named because he was not authorised to speak to the media.
Abu Attifel, which resumed production on June 14, can pump 50,000-60,000 bpd, NOC says.
Libya is targeting output of 1 million bpd by the end of July.
The OPEC member is excluded from a renewed output deduction pact struck by OPEC and non-OPEC producers which runs until the end of March 2018.
But rising supplies from Libya are threatening to overwhelm OPEC's efforts to rebalance the oil market and reduce global oil inventories.
Saudi Energy minister Khalid al-Falih signalled on Monday in a newspaper interview that Libya is unlikely to be asked to join the cut agreement.
"It is inappropriate to pressure Libya to slow the recovery in its production," he told London-based Asharq al-Awsat.
He added that Libya and Nigeria, which is also exempt from the cuts, "shouldn't be considered a threat to the initiative".
OPEC's May oil production was up by 336,000 bpd at 32.14 million bpd, led by a rebound in output from the two countries.
(Editing by Jason Neely) ((Ahmad.Ghaddar@thomsonreuters.com; +442075424435; Reuters Messaging: firstname.lastname@example.org))
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