Efforts to restore oil production in Libya are progressing faster than anticipated
15 November 2011
Restoration of oil production in Libya is on a far faster track than initially anticipated, according to the latest International Energy Agency’s Oil Market Report.
Crude oil supplies rose from an average of 75 thousand barrels per day (kb/d) in September to around 350 kb/d in October, and 500 kb/d in early November.
“In the midst of the pandemonium that ultimately led to the formal end to civil unrest in the country on 23 October, Libyan officials have made a herculean effort to restore upstream operations,” the report stated.
The IEA Oil Market Report – a monthly publication which provides a view of the state of the international oil market and projections for oil supply and demand 12-18 months ahead – has consequently upgraded its near-term projection, noting that production capacity looks on course to average 500 kb/d in the fourth quarter of 2011, with levels at the end of the year pushing closer to 700 kb/d.
Looking ahead to 2012, the IEA has also revised its forecasts for Libya, which were last made back in June. Production capacity is now assumed to average:
- 800 kb/d in the first quarter;
- 930 kb/ d in the second quarter;
- 1.07 mb/ d in the third quarter; and
- 1.17 mb/ d in the fourth quarter.
Libya’s production in 2010, before the conflict started, was around 1.6 mb/d and exports were around 1.3 mb/d. These levels are not expected to return until 2013.
Exports have also progressed more smoothly than expected, as the worst expectations of retribution killings and attacks on oil infrastructure have not come to pass following the death of Colonel Gaddafi.
“Much of the September output was earmarked to refill storage tanks and supply refineries, which kept a lid on exports, October saw shipments edge higher to an estimated 180 kb/d,” the report observed. “Though supplying domestic refineries remains a priority, November exports volumes are expected to be in the 200-250 kb/d range.”
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