Libyan oil minister expects crude output to double to 1.2 mil b/d in 10 days

Libya's oil and gas minister in the UN-backed Government of National Unity expects oil production to return to "normal" levels of 1.2 million b/d in a week to 10 days as the OPEC member begins pumping crude after lifting of force majeure on exports and oil fields.

"Production has reached today around 600,000 b/d. Production, maybe, I expect in a week to 10 days to return to normal levels ... of around 1.2 million b/d," Mohamed Oun said in an interview with Al Ahrar TV posted on the ministry's Facebook page July 20. "Three tankers are expected to begin exporting more than 2 million barrels."

Oil in storage is being exported and pumping from oil fields has started, which will allow Libya to boost exports, the minister added.

Under its new management, state-owned National Oil Corp. announced July 15 the lifting of force majeure on all oil terminals and fields, a day after the Tripoli-based GNU replaced long-serving chairman Mustafa Sanalla with ex-central bank governor Farhat Bengdara.

NOC said July 19 it expected five tankers to load crude from its oil terminals July 19-21, after the new management lifted force majeure following a nearly three-month closure.

Political turmoil

Three tankers have arrived at oil terminals Es Sider, Zueitina and Ras Lanuf to export crude, NOC said in a July 20 statement.

On the morning of July 20, the CRUDEMED tanker arrived at Ras Lanuf to load 600,000 barrels, while Maltese-flagged MATALA tanker stopped at ES Sider terminal to load 1 million barrels of Es Sider crude headed to Italy.

Another tanker arrived at Zueitina oil terminal and is expected to load 1 million barrels of Abu Attifel crude July 21, NOC said.

Libya's oil sector has been under severe political turmoil for months, exacerbating a tight market, with various groups seeking control of NOC and its revenues.

Prior to Sanalla's ouster, NOC said June 30 Libyan crude exports had ranged from 365,000 b/d to 409,000 b/d, a decrease of as much as 865,000 b/d from normal rates, as it declared force majeure on loadings out of the Es Sider and Ras Lanuf terminals, as well as production at the El-Feel oil field, following previous closures of the Brega and Zueitina terminals.

Two-year low

Crude production reached a two-year low of 650,000 b/d in June, according to the latest Platts survey of OPEC+ output by S&P Global Commodity Insights, against capacity of 1.2 million b/d.

Platts Analytics forecast "600,000 b/d of average July output, 200,000 b/d above current levels and half of effective capacity, but uncertainty persists," it said in a July 14 note.

Libya's eastern Gulf of Sirte includes four main oil export terminals with a total capacity of 630,000 b/d -- Es Sider at 250,000 b/d, Ras Lanuf 200,000 b/d, Brega 90,000 b/d and Zueitina 90,000 b/d.

Libya holds the largest crude reserves in Africa and exports mainly light-sweet crude grades, such as Brega, Es Sider and Sharara. Its main export markets are in southern Europe and China.