Libya's Es Sider oil output plunges 72% as pipeline leakage leads to closure

Libya's production of Es Sider crude has plunged 72% and will continue to decline for 10 days due to a pipeline leakage that led to its closure as the OPEC producer continues to suffer from lack of government funding to fix its deteriorating energy infrastructure.

Waha Oil Co is currently producing 77,000 b/d of Es-Sider crude, down from 285,000 b/d production capacity, state-owned National Oil Corp. said in an Oct. 27 statement.

"The leakage is large in the 30-inch pipeline from Dahra to Es-Sidra (km point: 37 km), and the control room of the Waha Oil Company announced the discovery of a sudden drop in pressure, which means that the rupture is large, and therefore instructions were given to close the pipeline," NOC chairman Mustafa Sanalla said in the statement. "So that we conduct the appropriate assessment and carry out emergency maintenance work."

Libya, which holds Africa's largest proven reserves of oil, produces light sweet Sharara and Es Sider export crudes that have a high yield of middle distillates and gasoline, making them popular with refineries in Europe and China.

Sanalla called on the government to supply NOC with enough funding to help repair deteriorating energy infrastructure.

"We are counting on the government to give us priority to rebuild/rehabilitate the dilapidated infrastructure and pay off our debts that have accumulated for years," Sanalla said.

"Reducing or postponing budgets has caused huge losses and preserving the country's oil capabilities is an absolute priority."

Delayed funding

NOC is also still awaiting its share of the federal budget, which has yet to be passed by parliament, affecting its ability to pay worker salaries and maintain its infrastructure.

Libya is currently pumping about 1.2 million b/d of crude, according to official figures, and the ministry is aiming to hit 1.4 million b/d by December and 1.6 million b/d in 2022.

That would be dependent on NOC receiving government funding from the national budget.

Even if that target is hit, it would still be well below Libya's peak crude production of about 1.75 million b/d in 2008.

Libya has been wracked by political instability, with the UN-backed Government of National Unity and the self-styled Libyan National Army vying for control of the country and its lifeblood oil industry. Key oil ports and production fields have seen their operations intermittently disrupted by civil unrest.