The North African country would be pumping almost 1 million barrels a day if it weren’t for a disagreement between the state-run National Oil Corp. and Libya’s Presidential Council that led Wintershall to shut down its production, according to the NOC. Wintershall said it stopped pumping oil at its onshore Concession 96 because it wasn’t included in the latest lifting programs for Amna grade crude at Libya’s Zueitina terminal.
“There are no technical reasons for the loss of production,” NOC Chairman Mustafa Sanalla said in an emailed statement. “Apart from the Wintershall shut-in, we lost a significant amount of production in April from the Sharara and El Feel fields, which were blockaded by units of the Petroleum Facilities Guards.”
Libya’s oil output is at the highest since October 2014, data compiled by Bloomberg show. The increase adds to the challenge that the Organization of Petroleum Exporting Countries and other major producers face after agreeing last year to pump less crude to counter a glut. Saudi Arabia and Russia said on Monday that they would consider prolonging their output cuts for longer than the six-month extension OPEC is widely expected to agree to when the group meets on May 25.
Political divisions and fighting between armed groups have disrupted Libyan output as the country with Africa’s largest crude reserves struggles to revive its most vital industry. Libya’s feuding administrations agreed last week to unite state institutions. The nation was producing about 700,000 barrels a day at the end of April, Jadalla Alaokali, an NOC board member, said at that time.
Fighting in early March caused two of Libya’s main oil terminals to close, forcing a number of fields to stop pumping. The ports, along the central coast, have since reopened. Libya pumped as much as 1.6 million barrels a day before an uprising in 2011 led to a plunge in output, and it’s currently one of the smallest producers in OPEC.
The NOC statement referred to a resolution that the Tripoli-based Presidential Council issued in March giving itself prerogatives over Libyan energy matters. Sanalla rejected the decree at the time and called on the council to revoke it.
Wintershall, based in Kassel, Germany, stopped producing at Concession 96 on March 7, the company said Wednesday in an emailed statement.
It wouldn’t be “economic” to keep producing at the concession without being able to export, Wintershall said in the statement. “Our concession agreements with the state of Libya are still valid and in full force.”