Libya's Oil Resurgence: Restarting Production at Two Major Fields

Libya, a significant player in the global oil market, is set to resume crude oil production at two of its major fields, Sharara and El Feel. This move comes after years of political instability and conflict that disrupted the country's oil production and exports. The restart of production at these two fields is expected to have a notable impact on Libya's oil exports, revenue, and the global crude oil market.

The challenges and obstacles that Libya faces in resuming full crude oil production are manifold. The country's infrastructure has been severely damaged by years of conflict, requiring significant investment and time to repair and upgrade. Additionally, the political instability and security concerns pose a threat to the safety of oil workers and the stability of oil production. Furthermore, the global oil market is highly competitive, and Libya must compete with other producers to maintain its market share.

The restart of production at Sharara and El Feel fields is expected to significantly impact Libya's oil exports and revenue. These two fields are among the largest in Libya, and their restart will contribute to a significant increase in the country's overall oil production. According to the National Oil Corporation (NOC), Libya's oil production is expected to reach 1.2 million barrels per day (bpd) by the end of 2021, up from around 1 million bpd in early 2021. This increase in production will result in a corresponding increase in oil exports, boosting Libya's revenue from oil sales.

The impact of Libya's increased oil production on global crude oil prices and market dynamics is likely to be modest. While Libya's increased production will contribute to an increase in global oil supply, the global oil market is highly dynamic, with other factors such as OPEC+ production cuts, US shale production, and demand from major economies also playing a significant role. Therefore, the impact of Libya's increased production on global crude oil prices is expected to be limited.

The restart of production at Sharara and El Feel fields compares favorably to Libya's pre-crisis output levels. Before the conflict in 2011, Libya's oil production was around 1.6 million bpd. The restart of these two fields will bring Libya's production closer to its pre-crisis levels, although it is still some way off.

Maintaining consistent production at these fields will be a challenge for Libya. The country's infrastructure and security concerns pose significant obstacles to stable production. Additionally, the global oil market is volatile, and changes in oil prices and demand can impact Libya's production decisions. However, with the right investment and political stability, Libya has the potential to maintain consistent production at these fields and even increase its output further.

The restart of production at Sharara and El Feel fields is expected to significantly enhance Libya's oil export capabilities and revenue. With increased production, Libya will be able to export more crude oil, boosting its revenue from oil sales. This increased revenue can be used to fund infrastructure development, security improvements, and other initiatives that can further boost Libya's oil production and exports.

The resumption of production at these two fields is also expected to influence the global oil market and Libya's role within it. Libya is a significant player in the global oil market, and its increased production will contribute to an increase in global oil supply. This increased supply can help to stabilize global oil prices and reduce the risk of supply disruptions. Additionally, Libya's increased production can help to diversify the global oil supply, reducing reliance on a single source of oil.

In conclusion, the restart of production at Sharara and El Feel fields is a significant development for Libya's oil industry. While the country faces numerous challenges in resuming full crude oil production, the restart of these two fields is expected to have a notable impact on Libya's oil exports, revenue, and the global crude oil market. With the right investment and political stability, Libya has the potential to maintain consistent production at these fields and even increase its output further, solidifying its role as a significant player in the global oil market.