The Rayayina Patrols Brigade of the Petroleum Facilities Guard agreed on Wednesday to end a two-year-long blockade of two of Libya’s major oil pipelines, according to the Libya Observer.
The Rayayina pipelines carry oil to the Zawia refinery and Mellitah terminals in western Libya from both the Al-Sharara and Al-Feel oilfields, which have been shuttered since the pipelines were first blockaded in 2014.
Reopening the pipelines could add more than 400,000 barrels per day to Libya’s oil production, and according to Khalid Shakshak, the Head of the Audi Bureau, reopening the pipeline would solve 70% of Libya’s economic woes.
According to secondary sources from OPEC’s Monthly Oil Market Report released on Wednesday, Libya’s November production was 575,000 barrels per day—up from 528,000 in October, and up from 360,000 barrels per day in September.
Libya is one of two OPEC members that are exempt from OPEC’s November 30 production cap.
Libya’s National Oil Company (NOC) says it has plans to increase production to 900,000 bpd in the near future, and to 1.1 million bpd in 2017—but the pipelines that carry oil from these two fields are crucial to that success. There is no guarantee, however, that the PFG will follow through with the removal of the blockade as promised, as similar agreements have fallen through in the past.
The losses due to the stoppage of two oilfields and pipeline has surpassed $27 billion, according to NOC.
While removing the blockade is a necessary step in bringing more oil back online, the fight does not stop there—funds must also be released to NOC so it can conduct maintenance and increase production. “Without both those things happening, we will not meet our goals,” NOC chairman Mustafa Sanalla said in its call to immediately reopen the pipelines back in September.
The Al-Feel oilfield is a joint venture between NOC and Italy’s Eni. The Al Sharara field is a joint venture between NOC and Spanish Repsol.
By Julianne Geiger for Oilprice.com