Haftar, the commander who controls eastern Libya, said on Friday that the army had decided to lift the ban in January this year and resume oil exports. This statement was the result of negotiations between him and Libyan Deputy Prime Minister Matchi. In the early morning of the 21st Beijing time, Libya’s Arabian Gulf Oil Company (AGOCO) also announced that it would restart oil production and operations at the Port of Massahariga.
However, Haftar said that two conditions need to be met to implement this oil embargo lifting agreement:
First, establish a mechanism to distribute oil export revenue, allowing the eastern administrative authorities and The western capital Tripoli can share oil revenue more evenly;
The second is that Wagner Company and other armed groups must withdraw from key oil fields and ports.
However, what is extremely dramatic is that Sarraj’s senior aide said that Libyan Prime Minister Sarraj did not accept the agreement reached by Deputy Prime Minister Matiqi and the opposition Haftar to lift the oil blockade. , which makes the outside world doubt the feasibility of Libya’s immediate resumption of crude oil production.
No matter what the final outcome is, what is certain is that there is hope for recovery in Libya’s crude oil industry. Libya is one step closer to reopening its oil industry after its national energy company announced it would resume some oil exports under the deal, albeit only at limited fields and ports.
It is reported that Libya is the country with the largest crude oil reserves in Africa. Oil facilities have always been the core of the Libyan civil war. Therefore, different armed groups often exert political and economic pressure by closing or destroying these facilities.
Libya’s National Oil Company said last week that it was unclear whether militia groups would withdraw from major areas such as Shalala in the southwest. With the armed forces approaching at close range, resuming oil production would have many consequences. Big safety hazard. According to people familiar with the matter, Libya’s largest oil field Sharala has not yet restarted, and the national oil company is assessing the safety situation of different oil fields.
However, even most of Libya There is no guarantee that oil facilities will be able to resume work soon, nor that the country will be able to ramp up production quickly.
Nearly a decade of conflict and chaos since the ouster of former dictator Muammar Gaddafi in 2011 has led to the near collapse of Libya’s energy infrastructure. Mustafa Sanalla, chairman of the Libyan National Oil Company, said in June this year that it would cost more than $100 million to repair the oil wellheads alone. And due to the lack of routine basic maintenance, pipe corrosion and tank collapse are common.
Haftar’s oil blockade has caused Libya’s daily crude oil production to plummet from about 1.1 million barrels in the past to less than 100,000 barrels. However, it still needs to be noted that if the oil embargo lifting agreement is reached, Libya’s increased crude oil supply will become a surprise in the OPEC+ production reduction plan, which may disrupt market pricing in the short term.
Other companies operating or using ports in eastern Libya have also announced that they will restart operations. These companies include the Arabian Gulf Oil Company and the Sirte Oil and Gas Production and Processing Company. The former has a daily output of nearly 300,000 barrels and is exported from Hariga Port.
Brent crude oil fell nearly 5% this month, a 35% drop from before the outbreak. If the blockade of oil facilities in Libya is lifted in the future, the outlook for oil prices will probably become even more bleak.
However, Goldman Sachs said that Libya’s announcement to end export restrictions will not disrupt the balance of the oil market, and confirmed that the price of Brent crude oil at the end of 2020 was US$49 per barrel, and the price is expected to reach US$65 by the third quarter of 2021. /bucket expected. </p
