January 21, 2018 / 4:01 PM / 4 months ago

Libya's NOC announces reopening of 50,000 barrels per day As-Sarah fields

TUNIS (Reuters) - Libya’s National Oil Corporation, NOC, announced on Sunday the reopening of the eastern As-Sarah oil fields, where more than 50,000 barrels per day (bpd) in a Wintershall WINT.UL concession had been shut in by a blockade since November.

Two wells started pumping on Sunday and production was expected to reach around 55,000 bpd by Monday, according to a source familiar with the matter.

The NOC said the municipality of the Ajkhara oasis decided to reopen the fields under pressure from the NOC and Libya’s public prosecutor.

The NOC had blamed Wintershall, BASF’s (BASFn.DE) oil and gas subsidiary, for an “unauthorised” shutdown it said had cost Libya more than $281 million.

It also called the decision to reopen the fields a “humiliating setback” for a parallel NOC based in eastern Libya, which for several years has tried to gain control over the production and sale of Libyan oil.

Since 2014, Libya has had competing governments based in Tripoli and the east. The eastern government, which is not recognised internationally, unsuccessfully attempted to prise the NOC and central bank’s powers away from the capital, as part of a wider struggle between rival political factions.

    Despite unresolved political divisions, NOC Tripoli has cultivated relationships in eastern Libya, where much of the country’s oil resources lie.

    Last year Libya’s output rose to around 1 million bpd, up from lows of around 200,000 bpd in 2016. Libya along with Nigeria has been exempted from OPEC-led production cuts.

    “The restart is a humiliating setback for the parallel structure set up by the interim government and for its campaign to shut down Libyan production in the Wahat region and beyond,” NOC Chairman Mustafa Sanalla was quoted as saying in the NOC statement.

    “The public prosecutor will continue to investigate this crime. The perpetrators and others considering using the tactic should remember this is a very serious offence for which there is no statute of limitations,” Sanalla said.

    There was no immediate comment from officials in eastern Libya or from Wintershall. At the time of the field shutdown, the German firm said protesters had demanded the closure of some production in its concession areas.

    The NOC had linked the shutdown at As-Sarah to a contract dispute with Wintershall. The dispute stopped output from the company’s Libyan concessions early last year before the two sides reached an interim agreement to resume production.

    Additional reporting by Ayman al-Warfalli in Benghazi and Patricia Weiss in Frankfurt; editing by Adrian Croft and Elaine Hardcastle

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