February 27, 2024

Italian Company Resumes Oil Production in Libya

PARIS — Eni, the Italian oil company, said Monday that it had restarted oil production in some of its Libyan oil wells, the first time it has done so since Western companies fled the turmoil that followed the uprising this year against Col. Muammar el-Qaddafi.

The move by Eni, the largest foreign player in the Libyan oil industry, marks an important step toward the stabilization of the country’s economy, which relies heavily on oil revenue. Eni’s French rival, Total, said Friday that it was resuming production from an offshore oil platform.

Eni said in a statement on Monday that its Mellitah Oil Gas venture had brought 15 wells back online in in Abu-Attifel, about 300 kilometers, or 185 miles, south of Benghazi.

Production is currently at about 31,900 barrels per day, Eni said, adding: “In the coming days, other wells will be re-activated in order to reach the required volumes to fill the pipeline connecting the field to the Zuetina terminal.”

Libyan companies had already restarted output in some areas, though the scale has necessarily been limited by the chaos of recent months and a lack of access to overseas markets amid fear for the safety of ships and crews.

Mahmoud Jebril, an official with Libya’s National Transitional Council, announced a resumption of production on Sept. 11, a message followed a day later by an attack on an oil refinery at the coastal town of Ras Lanuf. Colonel Qaddafi, and troops loyal to him, remain at large.

Libya’s output is relatively small, at 2 percent or less of global production, but the oil is of high quality and the loss of that supply had raised fears that rising oil prices would further weaken an already limping global economy.

Saudi Arabia and other OPEC members agreed during the summer to pump more to make up for the lost supply. They are expected to gradually withdraw the additional output as Libya comes fully online within the next year or so.

Abdalla el-Badri, the head of the Organization of the Petroleum Exporting Countries, has said Libyan oil production should reach about one million barrels a day within six months and be back to normal within 18 months.

Libyan oil facilities have not suffered the kind of damage that Iraq’s fields underwent during the first Gulf War, with fields owned by Repsol, a Spanish company, and Total essentially unscathed. Central Libyan facilities have suffered more damage.

Article source: http://www.nytimes.com/2011/09/27/business/global/italian-company-resumes-oil-production-in-libya.html?partner=rss&emc=rss

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