Libya Oil Output May Double as Protests in Western Region End

May 12, 2014 6:03 pm ET

May 13 (Bloomberg) -- Libya’s daily oil output may double to 500,000 barrels today after protesters agreed to reopen pipelines carrying crude from fields in the country’s western region, according to officials.

The valves at the Sharara field have reopened and oil will reach the Zawiya refinery within a few hours, Mansour Abdullah, an official at the refinery, said late yesterday. Earlier, National Oil Corp. spokesman Mohamed Elharari had said by phone from Tripoli that the Elephant, Hamada and Wafa fields, as well as Sharara, were due to resume production last night or this morning “and progressively increase output.”

The protesters agreed to stop blocking oil shipments after the authorities started preparations to hold elections for a new parliament, Elharari said. Spokesmen for the protesters couldn’t immediately be reached by phone for comment.

Repsol SA-operated Sharara and Eni SpA-operated Elephant are the largest fields in western Libya, with daily capacities of about 340,000 barrels and 140,000 barrels respectively before the shutdowns in March,

Protests in western Libya and a separate rebellion for self-rule in the east have curtailed the North African nation’s production to 237,000 barrels a day, according to National Oil. The country was producing about 1.6 million barrels a day before the revolt that toppled Muammar Qaddafi in 2011.

“For the first time in many months we will have in Libya production from the west and some production from the east,” Olivier Jakob, managing director at Petromatrix GmbH in Zug, Switzerland, said by e-mail. “If there are no new protests or interruptions then it will have a material impact on crude supplies in the Mediterranean” and raise Libya’s production capacity to 800,000 to 900,000 barrels a day, he said.

Crude exports have resumed from Zueitina and Hariga, two oil ports in eastern Libya shut down by separatists in July. The rebels threatened on May 7 to reoccupy those ports in protest at the election of Ahmed Maitiq as Prime Minister. The two largest oil ports in the east, Ras Lanuf and Es Sider, remain shut down and under rebel control.

--With assistance from Grant Smith in London and Zaid Sabah in Washington.