Libya’s NOC Restarts Oil Fields

Libya’s National Oil Corporation announced yesterday that fields producing over 50,000 bpd of crude oil have been restarted.

NOC’s chairman Mustafa Sanalla called the restart of the fields “a humiliating setback” for the eastern NOC, which has been vying for more power over Libya’s oil wealth just as the Tobruk government vies for power with the one based in Tripoli, which is internationally recognized.

"Reopening the oilfields is a set back that will test the legitimacy of the parallel NOC in east Libya and its efforts to shut down production in Al-Wahat area and elsewhere," Sanalla said.

The reopening of the fields, shut down by a blockade for more than two months, was the result of the combined efforts of NOC and the country’s public prosecutor, which forced the local authorities of the Ajkhara oasis to reopen them.

Germany’s Wintershall stopped pumping oil from the fields last November, under pressure from local residents who demanded that the German company hire more local people to work in the fields and that NOC fulfill a number of other demands, too. However, NOC called the shutdown illegal on the part of Wintershall, estimating the losses at $281.4 million based on a total production of 4.4 million barrels that were not produced in the duration of the shutdown.

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When Wintershall first shut down production at one of the fields at the beginning of November, Sanalla accused the company of failing to stick to the terms of its contract with NOC and bluntly invited it to leave if it was unable to do it.

According to NOC’s head, the shutdown was not triggered by the protest but by Wintershall’s unwillingness to accept a change in the contract terms that eliminated a number of advantages that were unique to Wintershall and put it on an equal footing with all other foreign oil companies operating in Libya.

By Irina Slav for Oilprice.com

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