ROME — Italian and French energy companies have resumed partial oil production in Libya after months of civil war, a potential economic lifeline for Libya’s new government as it scrambles to rebuild.
Officials of Libya’s transitional government are still awaiting U.N. action to unfreeze billions of dollars in assets. They say the funds unfrozen so far aren’t enough to significantly rebuild Libya’s health, education and other institutions after 42 years of languishing under Moammar Gadhafi’s regime.
Italian energy giant Eni said Monday it has resumed oil production in Libya after months of interruption due to the civil war that toppled Gadhafi’s rule. By Monday, 15 wells had been tapped, producing some 31,900 barrels of oil per day.
The French energy company Total said it has restarted some production last week.
It was not clear how long it would take Libya to return to its pre-war production of 1.6 million barrels a day.
But even the limited resumption of oil production is an important psychological sign of foreign energy companies’ faith in Libya’s future. Libya sits atop Africa’s largest proven reserves of conventional crude, and with a population of only 6 million, raked in $40 billion last year from oil and gas exports.
The Libyans say they have enough cash to cover expenses such as public sector salaries for a few months, but much more is needed if nation-building is to get going on a large scale.
Eni said it couldn’t estimate how much an impact its first resumption of production might have on the Libyan economy.
French company Total said Monday it had resumed production Friday in partnership with Libya’s state-run oil company and a German company at an offshore well called Al Jurf. Production is slowly ramping up and will eventually be 40,000 barrels a day, according to Total spokesman Florent Segura.
Eni’s revived production operation has focused on 15 wells at the Abu-Attifel field some 185 miles (300 kilometers) south of the eastern city of Benghazi, and are being conducted by Mellitah Oil & Gas, a partnership between Eni and Libya’s state-run National Oil Corp.
Eni said in a statement that other wells will be reactivated “in the coming days” to reach the “required volumes to fill the pipeline” between the Abu-Attifel field and the Zuetina port on the Mediterranean. The Abu-Attifel field was the first “giant” oil field discovered by Eni in the 1960s.
Spain’s Repsol YPF said Monday it hasn’t restarted production yet at the fields it operated in Libya and doesn’t yet know when that could resume. No Repsol employees have been sent yet to the firm’s facilities in Libya, but the company is using Libyans and contractors to assess its infrastructure there.
“Repsol continues to closely monitor events in Libya,” said company spokesman Kristian Rix.
Eni has been active in Libya, Italy’s former colonial ruler, since 1959 and is the largest foreign player there in terms of hydrocarbon production. Before full-scale civil war erupted in February, Eni was producing 273,000 barrels of oil equivalent per day in Libya. Eni’s operations, mirroring Libya’s oil sector in general, ground to a halt because of the fighting.
Natural gas is another mainstay of Libya’s economy.
Eni CEO Paolo Scaroni visited Tripoli earlier this month to lay the groundwork for relaunching Libyan gas exports to Italy via the Greenstream pipeline, which can carry roughly 10 billion cubic meters of natural gas per year. It hasn’t been operational since late February.
Scaroni has set what he calls an ambitious target date of Oct. 15 for getting the gas flowing again through Greenstream. His visit to Tripoli marked the first by a foreign company chief.
Officials from the Libyan transitional government have said the new government would respect past contracts and not rush into any new deals.
• Sarah Di Lorenzo contributed from Paris. Tarek El-Tablawy contributed from New York.
Please read our comment policy before commenting.