Rystad Energy – the Norwegian oil firm – said Libya’s 2020 exit production rate will be between 700.000 and 800.000 barrels per day, adding that this estimate itself carries downside risk.
The energy firm said, in the most optimistic scenarios, once oil production comes back on line, it would take Libya another three to four months to ramp up production to hit the 1 million bpd mark.
It added that the damage is not just limited to the short-term as the prolonged blockade has negatively impacted both infrastructure and oil wells, so the eventual ramping-up of production will demand CAPEX spending on rehabilitating wells and pipelines.
“For this purpose, Libya’s National Oil Company (NOC) estimates that between US$500 million and US$1 billion is needed just to reach the pre-blockade levels of 1.2 million bpd.” It added.
Rystard Energy also said that it is not only oil output that has languished as Libya’s production capacity itself has lost between 100.000 bpd and 150.000 bpd due to the ongoing blockade, according to Rystad’s estimates.
If this deadlock is not resolved in the next few months, we might see it dropping by an additional 200.000 to 300.000 bpd, which puts the country’s desired oil production level of 1.5 million bpd even further out of reach.