Tuesday, Oct 25, 2011

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   By Benoit Faucon 
   Of DOW JONES NEWSWIRES

LONDON (Dow Jones)--A giant Libyan oil field partly owned by Repsol YPF SA (REP.MC) has restarted production after months of shutdown, the latest foreign operation to return as the death of Moammar Gadhafi eases some security concerns.

Speaking to Dow Jones Newswires, Nuri Berruien, chairman of Libya's National Oil Co., said the Sharara field in Libya's Southern desert was producing 60,000 barrels a day and may soon reach 100,000 barrels a day.

A spokesman for Repsol confirmed that the company is restarting and ramping up production but declined to comment further.

NOC's Berruien said the Repsol resumption has brought Libya's overall production close to 500,000 barrels a day, close to a third of Libya's prewar production of 1.6 million barrels a day.

Sharara is the largest Libyan oil field among those with a foreign partner and, according to NOC's website, has a normal production of 340,000 barrels a day. It is operated by a joint-venture whose shareholders also include OMV AG (OMV.VI) and Total SA (TOT). OMV declined to comment and a Total spokesman couldn't be reached.

Sharara's production is now sent to the Zawiya refinery and exports will start once the plant's capacity of 120,000 barrels a day is reached, Berruien said.

Most of Libya's oil production shut down when the civil war erupted in February, leading to Gadhafi's toppling in August and his death last week.

Repsol's foreign joint venture is the latest to restart, hard on the heels of Wintershall Holding GmbH, Total and Eni SpA (E).

The fall of Gadhafi's last stronghold and his subsequent death has sparked hopes the recovery of the oil industry can increase pace. In particularly, it paves the way for the appointment of a new cabinet expected to include a fully-fledged oil minister.

Deputy oil minister Omar Shakmak told Dow Jones Newswires Monday that Abdulrahman Benyezza, a longstanding Eni executive, is still a top contender for the oil ministry's position.

Libya's recovery has surprised most observers, including the authoritative International Energy Agency, which had said the country's oil production would be no more than 400,000 barrels a day by the end of the year.

Still, the agency said last week it was keeping its assumption of 1.1 million barrels a day of Libyan oil production by the fourth quarter of next year.

-By Benoit Faucon, Dow Jones Newswires; +44-20-7842-9266; benoit.faucon@dowjones.com

(Ilan Brat in Madrid and Nicole Lundeen in Vienna contributed to this report.)

(END) Dow Jones Newswires

25-10-11 1403GMT