Jan. 22 (UPI) — German energy company Wintershall said it was able to restart production from a license area in Libya, which the government said was closed illegally.
A spokesman for the company said production resumed from the C96 license area, part of the As-Sarah field, during the weekend. Production was closed in November following pressure from a municipality that complained the national oil company wasn’t meeting local demands.
“At the beginning of November 2017, the community of Jakhira demanded that Wintershall should shut in production in C96,” the spokesman said in a statement emailed to UPI. “We immediately informed NOC about the blockade in November.”
The Libyan National Oil Corp. said the closure resulted in a total loss of hundreds of thousands of barrels in production at a cost of $281 million. NOC Chairman Mustafa Sanalla said that reopening the field was a “humiliating” blow to the Jakhira municipality and the closure would be investigated as a crime.
“The perpetrators and others considering using the tactic should remember this is a very serious offense for which there is no statute of limitations,” he warned.
Wintershall said the As-Sarah field is its largest producer in Libya. Production has moved in fits and starts since the end of the reign of Moammar Gadhafi in 2011. A year ago, production from As-Sarah was limited to around 35,000 barrels per day.
Libya produced around 962,000 barrels of oil per day on average in December, just short of the post-Gadhafi record. Output before civil conflict in 2011 was above 1 million barrels per day.
Libya, along with Nigeria, is formally excluded from an effort by the Organization of Petroleum Exporting Countries to balance an oversupplied market with coordinated production cuts. Both countries are out of the agreement so they can use oil revenue for national security efforts.