Oasis And Sharara Spearhead New Libyan Output Surge

Oasis And Sharara Spearhead New Libyan Output Surge

Libya continues to make impressive production gains on the back of fresh incremental supply from Repsol-operated Murzuq basin fields and the Oasis (Waha) group of fields, operated by US firms Marathon, ConocoPhillips and Hess. These between them have added almost 250,000 b/d of output in just six weeks. State oil firm AGOCO is now producing over 300,000 b/d and is aiming to hit 400,000 b/d by end-March, AGOCO Chairman Ahmad al-Majbri tells MEES.

“By end March we will be at the same level as we were before the revolution broke out in February,” says Mr Majbri. Benghazi-based AGOCO initiated Libya’s production restart after last year’s civil war brought output to a virtual halt. “Hamada and al-Baida are at capacity (see table). Nafoura and Sarir have only a little to go. The only thing is Mesla. The former regime attacked the facilities there and did a lot of destruction. Two attacks, one on 4 April and one on 12 June, did around $90mn worth of damage. So it will take a bit longer for Mesla to fully return,” Mr Majbri explained. During the six-month conflict, and in the first months after the fall of the Qadhafi regime, AGOCO took care of its own crude sales, but since December state oil firm National Oil Corporation (NOC) has retaken responsibility for all Libyan crude and product sales and purchases, he added.

Up to now, Libya’s upstream rehabilitation has consistently impressed. “We were concerned about the performance of the submersible pumps. But by and large they seem to be working fine” notes one foreign oil operator. “I have to say they have done a really great job – much better than we expected. The only question mark I have is, can they keep it up? Is it sustainable?” he adds. Certainly, while MEES hears from two sources that Akakus production has gone over 300,000 b/d, the message Repsol is sending to head office is that sustainable production is nearer mid-December levels of 220,000 b/d. The other positive development of the last few weeks has been the restart of loading from Ras Lanuf export terminal. When export capacity there fully returns, this will allow for Wintershall to bring production from the NC-96 and NC-97 fields back to near 100,000 b/d.

Last month, Total restarted output at its 25,000 b/d capacity Mabrouk field, which saw some fierce fighting in its vicinity. Exact production levels at Mabrouk could not be obtained by MEES press time. Similarly figures given for Mellitah Oil Company output are also estimates. On 19 January, NOC announced output at Suncor’s al-Naga field had restarted, with total Harouge production standing at 81,000 b/d. Defa field, with pre-war capacity of 150,000 b/d, and Gialo (70,000-80,000 b/d) have been the main drivers of Oasis production growth over the past six weeks.

Danger Signs

A return to security and political stability has been less smooth. There has been an escalation in clashes between rival armed groups including one on 1 February inside the capital Tripoli. Libyans are getting increasingly exasperated with their new government’s inability to bring the situation under control and the lack of security has affected investor sentiment. While operators of producing fields have returned, foreign exploration companies, with exception of Turkey’s TPAO and Germany’s RWE (which is preparing a development plan) are yet to return.

Meanwhile, British press on 31 January reported that Libyan dissidents Sami al-Saadi and ΄Abd al-Hakim Belhadj, now a senior Libyan military leader, were to sue former MI6 officer Sir Mark Allen for alleged complicity in their rendition and torture at the hands of the former regime. Sir Mark later joined BP and was involved in the UK firm’s entry into Libya in 2007, when it secured its largest global exploration deal.

Libya's Recent Oil Production

Field/Project	Operator	Restart Date	10 Nov Production (‘000 b/d)	15 Dec Production (‘000 b/d)	01 Feb Production (‘000 b/d)	Pre-War Capacity (000 b/d)	Notes
Abu Attifel	Eni (Mellitah)	26-Sep	50	60	60	90	Started at 31,900 b/d
Bouri (offshore)	Eni (Mellitah)	22-Nov	0	40	45	50
Elephant	Eni (Mellitah)	9-10 Nov	40	70	90	130
Wafa	Eni (Mellitah)	early Sep	10	12	14	15	Condensate from 580mn cfd gas field
Bahr al-Salam	Eni (Mellitah)	02-Nov	10	20	20	30	Condensate from 950mn cfd offshore gas field
Samah, Dahra	Oasis	27-Nov	0	100	100	365	Total Oasis pre-war capacity, production.
Gialo, Defa	Oasis	21-Dec	0	0	150		Defa 150,000 b/d capacity
Jurf (offshore)	Total	22-Sep	44	44	44	44
Mabrouk	Total	Early-Jan 2012	0	0	10	25	Field in area of intense fighting
NC-96, NC-97	Wintershall, Gazprom	18-Oct	20	30	60	105
Intisar, Absa	Occidental, OMV (Zueitina)	1-5 Oct	39	40	46	60	Zueitina total pre-war capacity is 60,000 b/d
Sharara	Repsol (Akakus)	20-25 Oct	95	220	310	360	Total Akakus pre-war capacity including NC-186, NC-187 blocks
Amal	Suncor (Harouge)	-	20	30	75	90	Capacity includes 10,000 b/d Naga field
Naga	Suncor Harouge	Mid-Jan 2012	0	0	8	10
Sarir	AGOCO	12-Sep	175	160	150	200	Sarir capacity 200,000 b/d-220,000 b/d
Mesla	AGOCO	20-30 Sep	70	75	80	100
Nafoura	AGOCO	5-15 Oct	20	20	50	60
Hamada	AGOCO	1-15 Nov	0	10	10	10	At capacity
al-Baida	AGOCO	-	0	0	14	14	At capacity
Luhaib, Raquba	Sirte	12-Dec	0	17	20	100	Total Sirte Oil capacity
Total			593	948	1,356	1,868

Source: Industry sources, MEES estimates.

Copyright MEES 2012.