(Adds second NOC statement)
By Aidan Lewis
TUNIS May 10 Libya's oil production is running
at above 800,000 barrels per day (bpd) for the first time since
2014, the National Oil Corporation (NOC) said on Wednesday, but
a commercial dispute with German oil firm Wintershall
has shut in a further 160,000 bpd.
Libya's output could reach between 1.1 million and 1.2
million bpd if political obstacles were removed, the NOC said in
"We are able to produce an average of 1.1 million to 1.2
million (bpd) over the rest of this year, but for this to happen
our oil must flow freely. A national effort is required," NOC
Chairman Mustafa Sanalla said.
Libya's output remains well below the 1.6 million bpd it was
producing before the 2011 uprising. Armed conflict, political
disputes and local blockades have made production highly
volatile since then.
Sanalla said the dispute with Wintershall, BASF's
oil and gas arm, was linked to a decree issued this year by the
Presidency Council of the U.N.-backed government in Tripoli,
giving it the power to negotiate investment agreements with
The NOC opposes the decree, Resolution 270,
which Sanalla said had been "drafted with the assistance of
Wintershall to benefit Wintershall".
"This is a very serious matter," Sanalla said. "We would be
producing almost 1 million (bpd) if it were not for
Wintershall's refusal to implement terms it agreed to in 2010."
"I have asked the Presidency Council to withdraw Resolution
270 for this reason and because it oversteps their authority. It
has declined, and has instead sided with Wintershall against
There was no immediate response from the Presidency Council.
The NOC said in a follow-up statement that it had signed a
memorandum of understanding with Wintershall in 2010 to extend a
50-year concession for two onshore production areas and convert
it to EPSA IV terms, "in line with other foreign operators in
Libya". It said Wintershall "chose not to honour its
Wintershall said its concession deals with Libya were "still
valid and in full force", and that it was in contact with the
NOC about a number of issues. It said it was forced to shut in
some production in March after being left off shipping schedules
at Libya's Zueitina terminal.
The dispute with Wintershall is also shutting in production
at the Abu Attifel and Rimal fields, operated by NOC and Italy's
Eni, due to pipeline configurations, a second Libyan
oil source said.
Wintershall produced up to 100,000 bpd in Libya before 2011,
but it has produced no more than 35,000 bpd since mid-2013. A
graph published by the NOC showed Wintershall's Libyan
production gradually dropping to zero since the start of this
Libya, along with Nigeria, is exempt from a deal agreed by
the Organization of the Petroleum Exporting Countries last year
to cut global production.
The country has set ambitious production targets, though
these remain vulnerable to continuing political divisions and
local stoppages, as well as financial constraints.
The NOC says it needs $550 million of investment to bring
production to 1.32 million bpd by the end of this year, a
further $1.8 billion to raise it to 1.5 million bpd by the end
of 2018, and $18 billion to produce 2.2 million bpd by 2023.
It says most of next year's investment would be aimed at the
Bahr Essalam offshore development with Eni.
(Additional reporting by Ahmad Ghaddar in London and Vera
Eckert in Frankfurt; Editing by Susan Thomas and Greg Mahlich)