Libyan oil production drops

22 September 2014

Output falls for the first time since militias ended port blockade

Libyan oil production has fallen to 700,000 barrels a day (b/d), according to the Opec member’s National Oil Corporation (NOC), dropping from the production rate of 870,000 b/d that was announced on 14 September.

This decline of 170,000 b/d is the first time Libya’s output has dropped since militias ended a year-long blockade of key oil terminals.

It comes in the wake of a rocket attack on the Zawiya refinery and after officials decided to halted production from Libya’s Sharia field due to declining security.

The Sharia field was producing about 250,000 b/d before the disruption.

Libya has seen a rebound over the year with production rising from just 100,000 b/d in May, but analysts are expecting increased disruptions in the sector as political tensions increase.

Libya currently has two competing governments that were both sworn in this month.

Libya’s House of Representative, was elected in June general election and is currently located in the Eastern city of Tobruk due to concerns about security in Tripoli, and Libya’s second city, Benghazi.

The second parliament is backed by a coalition of heavily armed Islamist-led militias. It refuses to recognise the House of Representatives and currently holds sway in Tripoli.

“Placed in its broader context, it is hard to see how production can steadily remain at current levels,” says Geoff D Porter, head of North Africa Risk Consulting.

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