Oil production resumes in Libya

French oil company Total SA and Italian oil giant Eni SPA have resumed production of crude oil in Libya, while state-owned Sirte Oil said it has restarted output from its eastern gas fields of Hateiba and Assoumoud. Sahi field is in the process of restarting.

“We have started producing and sending gas to the power plants of Benghazi and Zuetina,” said a Sirte Oil spokesman, adding, “Soon we won’t have to use diesel anymore.”

ENI announced that it had resumed production at 15 wells, producing 31,900 barrels a day at Abu-Attifel, south of Benghazi, in partnership with Libya's state National Oil Corp. More wells are to be activated in the coming days, ENI said. Production could reach 140,000 barrels a day by the end of November.

Total restarted production from the offshore Al Jurf platform, a joint venture with NOC and Wintersall. Production should reach 40,000 barrels a day in a few weeks.

The International Energy Agency said that the pace of restoration of production will depend on the extent of the damage to the oil fields and whether they were shut down in an orderly way or in a "rushed, haphazard manner." The IEA now predicts production of 350,000–400,000 barrels a day by year end, rising to 1.1 million b/d by the fourth quarter of 2012.

Libya has Africa's largest proven reserves of conventional crude. With a population of only six million, the country earned $40 billion last year from oil and gas exports.

Before Libya's social uprising in mid-February, Eni was producing 273,000 barrels of oil equivalent per day in Libya. It was the largest foreign producer in Libya before the civil war broke out, and its operations, mirroring Libya's oil sector in general, ground to a halt because of the fighting.

Libyan transitional government officials have said the new government would respect past contracts and not rush into any new deals.