Libyan oil production will remain depressed for three years after conflict: report

Libyan oil production will not be restored to what it was before the current crisis broke out until at least three years after the country returns to normalcy, and that depends on the damage to the country's infrastructure being limited, and on the return of international oil companies and foreign workers. Oil production in Libya has declined from 1.6 million barrels per day before the crisis to just 100,000 b/d now. The Edinburgh-based consultancy Wood Mackenzie made the statement in a report released today.

If the conflict, already six months old, is prolonged until beyond the end of 2011, the report states, the recovery period will also be extended, as infrastructure continues to deteriorate. International isolation could keep oil production "shut in" for "many more years."

If, however, a new Libyan government seeks to use its oil and gas resources more effectively "for the benefit of the people," they will have to form new partnerships with international industry players with the financial and technological skills necessary to bring the industry back. There is potential, the  report says, for production of 3 million barrels of oil per day.

The country's oil fields are at different levels of development and also of production. Those in the eastern part of the country in the Sirte basin are more "mature" and complex, and will require more time to restore production. In the west, oilfields in the Murzuk and Pelagian Basins could produce up to 70 per cent of pre-crisis levels soon after being reopened.