French Total plans to increase its investments in Libya’s oil industry, the National Oil Corporation said, adding it had discussed with the company raising Libya’s production to “the highest levels.”
Total has stakes in several Libyan oil fields, including the nation’s biggest, Sharara. The field, along with many others, was shut down for more than eight months this year after groups affiliated with the eastern government blockade oil export terminals, which pushed Libya’s oil output from above 1 million bpd to less than 100,000 bpd.
In late September, when the Libyan National Army started lifting the blockades from the terminals, production began increasing and has to date topped 1.2 million bpd. However, earlier this month, NOC warned that this level of production may not be sustainable.
“The National Oil Corporation asserts that it may not be able to sustain the current production levels and these levels may be reduced or totally ceased under the reluctance of some entities and their hindering of NOC’s efforts to increase production and restore the prosperity of the national economy,” the company said in a statement.
Even so, Libya has signaled it would not be joining the OPEC+ production control effort, from which it has been exempted due to the frequent production outages caused by the conflict between the eastern-affiliated LNA and the Government of National Accord, which was recognized by the UN.
In fact, NOC’s chairman Mustafa Sanalla recently said that Libya might consider joining the cuts only when it reaches a production level of 1.7 million bpd. This would be more than the country produced prior to the 2011 civil war that saw the end of the rule of Muammar Ghadaffi.
Libya’s fast production ramp-up has added one more pain to OPEC’s already substantial load as the cartel still grapples with a global oil supply overhang that has been slow to decline amid the continuing pandemic. The outlook remains gloomy, too, with reports suggesting there may be internal divisions in OPEC regarding whether it should extend the current rate of cuts, deepen them or reduce them as initially planned.