Libya Resumes Oil Production at Waha

Libya resumed production at the key Waha oilfield last week bringing overall production to 580,000 barrels per day, a senior Libyan oil official said on Tuesday.

The OPEC member's production has been crippled for several years by an on-and-off blockade of its largest export terminals, militant attacks by groups including Islamic State and a lack of a unified government.

The Waha field, operated by the Waha Oil Co, is one of the main contributors for the major Es Sider export grade. It is the first Es Sider field to resume and was producing 50,000 bpd as of Tuesday. Output used to be around 330,000 bpd pre-war but some infrastructure has been damaged and capacity is lower.

The output is being redirected to the Ras Lanuf export terminal instead of the usual Es Sider port owing to limited storage, the official, who declined to be identified, added.

The Es Sider port now only has a storage capacity of 1.2 million barrels versus its pre-war level of five million barrels after being badly damaged by fighting with Islamic State.

The Es Sider grade will eventually be split between the two ports to avoid bottlenecks as output increases.

The ports of Ras Lanuf and Es Sider were among the facilities blockaded from December 2014 until July this year by the Petroleum Facilities Guard (PFG) over payment disputes. After a deal was brokered with the PFG, the terminals were then seized by the Libyan National Army under eastern commander Khalifa Haftar in September.

Libya's state oil firm National Oil Corp. decided to resume operations with Haftar still in control. Ras Lanuf exported crude from storage in September and exports of the Es Sider grade are expected to resume this month.

Exports of the Amna grade, usually out of Ras Lanuf, will be rerouted to the port of Zueitina to be exported along with the Zueitina and Bu Attifel grades.

The country's overall production target of 900,000 bpd by the year-end hinges on the restart its major western oilfields - El Sharara and El Feel - otherwise, it will peak at around 650,000-700,000 bpd.

Libya has been torn apart by civil war since the fall of Muammar Gaddafi in October 2011. The North African country used to produce some 1.6 million bpd before the unrest and briefly came close to those levels after Gaddafi's death during a period of relative peace.