Libya's oil production is currently facing severe disruptions due to ongoing political turmoil, significantly impacting the country's economy. The recent ousting of former Central Bank Governor Sadiq Al Kabir and the subsequent appointment of Deputy Governor Abdel-Fattah Ghaffar have intensified disputes within the financial sector. Meanwhile, Khalifa Haftar's forces maintain control over key oil ports, further complicating the situation.
However, there are signs of recovery as Prime Minister Abdul Hamid Dbeibeh met with National Oil Corporation (NOC) head Farhat Bengdara on October 5, 2024, to discuss strategies for boosting oil production following the reopening of oil fields and the resumption of exports. Dbeibeh emphasized the need for strategic plans to strengthen Libya's oil sector and coordinate with international partners for investment, indicating a proactive approach to stabilize the economy amidst global economic crises and fluctuating oil prices.
In a significant development, the NOC announced the completion of the first development well (B54) in the Sarra oil field, drilled by Sarir Oil Operations Company. This well has an initial production capacity of 2,400 barrels per day, which is expected to reach 3,000 barrels per day after final tests. This marks the first well drilled in the Sarra field since 2013 and since the establishment of the Sarir Company in late 2020, showcasing a positive step forward in Libya's oil exploration efforts. [e51b9f9c]
As a result of the political challenges, Libya's oil production had previously plummeted from 1.17 million barrels per day in July to just 591,000 barrels per day. The Sharara oil field, one of the largest in the country, had been largely closed following a Spanish arrest warrant issued for Saddam Haftar, which sparked local protests and contributed to the shutdown. This decline in production raised concerns not only for Libya but also for global oil markets, as both the US and Europe watched rising oil prices with apprehension.
The current crisis presents significant challenges for Opec+, which is grappling with how to adjust production plans in light of the fragile situation in Libya. Analysts suggest that the instability is more pronounced than in previous years, indicating a precarious future for the country's oil sector and its economic recovery. [4cd2be10][50b92ebf]