OPEC’s Libya plans to almost double crude production next year even as the producer group tries to implement a deal to trim production and ease a global supply glut.
The country with Africa’s largest crude reserves currently produces 600,000 barrels a day, state-run National Oil Corp. Chairman Mustafa Sanalla said in a statement posted on the company’s website. It’s seeking to boost output to 900,000 barrels a day by the end of 2016 and about 1.1 million barrels next year, he said.
Libya, a member of the Organization of Petroleum Exporting Countries, has been working to boost production and exports since the NOC reached an agreement in September with Khalifa Haftar, the commander of armed forces controlling important oil ports. As a result of that deal, the country was able to ship 781,000 barrels from the port of Ras Lanuf on Sept. 21, the first international cargo from the terminal since force majeure was declared in December 2014. The country’s largest port, Es Sider, may resume exports within days.
The North African country’s production recovery highlights the efforts OPEC must make to achieve production cuts needed to rein in the oversupply that has pushed down prices. Brent crude, which traded at more that $115 a barrel in June 2014, has dropped to about $47.
Libya, along with Nigeria and Iran, has been exempted from the deal OPEC reached in September in Algiers. The more those countries pump, the greater the pressure on other members of the group to make even bigger curtailments of their own if production is to be brought under control. OPEC meets Nov. 30 in Vienna to discuss proposals to limit supply.
Sanalla said Libya is ”heading toward economic revival” but warned against any military attacks on oil installations that could disrupt plans to increase output.
Libya produced 1.6 million barrels a day before the 2011 uprising that ousted longtime leader Moammar Al Qaddafi. Output shrank after international oil companies withdrew amid fighting between rival governments and armed groups over the nation’s oil fields, ports and pipelines. The conflict also halted exports from the nation’s main oil ports.
Es Sider hasn’t exported crude since force majeure, a legal status protecting a party from liability if it can’t fulfill a contract for reasons beyond its control, was declared on loadings almost two years ago. The curbs were lifted in September.