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Platts: Ex-Libyan Oil Minister Says Libya Could Resume Crude Oil Output in 3-4 Months

DUBAI - Libyan oil output is likely to resume within three to four months after the end of hostilities at a rate of 300,000-400,000 b/d initially and rise to 1 million b/d within a year or less, Shokri Ghanem, the former chairman of the National Oil Company and the country's de-facto oil minister said Monday.

"I don't think they can resume production immediately. It might take place in three or four months but to go back to the level they used to produce it may take two years," Ghanem told Platts in a telephone interview, his first remarks since he defected in mid-May.

Ghanem, a former prime minister and OPEC veteran, said that some of Libya's oil wells and ports could start producing, it would take "two to three months for oil to start oozing."

"To get back to normal, it will take two years because there is some damage to installations and there is a problem with some wells that were not closed properly," Ghanem said, referring to the hasty departure of foreign oil companies at the start of the Libyan rebellion on February 17.

"They may start at 300,000 to 400,000 b/d and in a year's time they may reach a million, maybe before that. But first there will be some repairs to the pipeines and the boosters and pump stations," he said.

Ghanem said some equipment at the abandoned fields had been looted and contractors' camps were destroyed. "So to build and repair will take some time. There is a big need. All the cars have been looted," he explained.

The eastern oil fields of Mesla and Sarir, which are under the control of the Arabian Gulf Oil Co., which split from NOC at the start of the crisis, can produce as soon as they are given the green light but possibly at a lower rate than their capacity. Mesla and Sarir may be able to produce 150,000 b/d if they export from the eastern port of Marsa el Hregha, he said.

Production could be ramped up to 300,000 b/d if the blend is exported from Ras Lanuf, Ghanem said but noted that Sarir installations had been damaged in attacks in April by troops loyal to Moammar Qadhafi and the extent of the damage is not known. There was also some damage to Mesla, he said.

Furthermore, Sarir crude is waxy and would need to be spiked with Mesla if it is to be exported.

There is also the status of the pipelines to consider, some of which have been bombed in the west in an effort to cut off supply to Qadhafi's troops and logistics. "It is not simply a question of opening the tap."

Ghanem said Italy's Eni, French Total and Spain's Repsol were better placed to restart their production while he expected a delay to the resumption of output from the Waha Group, formerly the Oasis group, a joint venture between NOC and the US' Marathon, Hess and ConocoPhillips. The Waha concessions produce about 350,000 b/d.

Libya, which has the largest crude oil reserves in Africa, was producing an average 1.6 million b/d before the crisis and exporting 1.3 million b/d of light crude oil, mainly to the European market.

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© Press Release 2011