NOC estimated the reopening of the pipeline along with increasing production from two oil fields could supply an additional 270,000 b/d of crude oil within 3 months. The reopened oil fields were Sharara and El Feel.
Libya’s current production fell to less than 300,000 b/d at times during 2016. Analysts noted that it remains uncertain if Libya will get additional oil to the world market. The nation’s oil production fell from a peak of more than 1.6 million b/d after Moammar Gadhafi death in 2011.
Increased Libyan production could complicate an attempt by the Organization of Petroleum Exporting Countries attempt to support oil prices. OPEC plans to cut cartel production by 1.2 million b/d starting in January 2017. Libya and Nigeria were exempted from that agreement.
Brent crude oil prices fell on the London market after NOC’s announcement on Dec. 21.
The fields could add 175,000 b/d to Libya’s output within 1 month, NOC estimated, adding that volume could grow to 270,000 b/d in 3 months. OPEC reported Libya produced almost 575,000 b/d during November.
NOC Chairman Mustafa Sanallah issued a news release saying the pipeline and fields were reopened without any “payoffs” or “backroom deals.”
“For the first time in nearly 3 years all our oil can flow freely,” said Sanallah. “I hope this marks the end of the use of blockade tactics in our country.”