(Bloomberg) -- Libya’s biggest oilfield is gradually resuming production after a five-month shutdown as regional powers push to end the country’s civil war.
The restart of the Sharara field in the southwest comes after “lengthy negotiations” with militants to reopen a valve closed in January, the state-run National Oil Corp. said Sunday. Production will resume at an initial 30,000 barrels per day and take three months to return to full capacity due to damage caused by the shutdown, it said in a statement.
Sharara was producing around 300,000 barrels before the cutoff amid an offensive by Khalifa Haftar, who leads a rebel military force based in the country’s east.
The field’s resumption follows setbacks in recent weeks for Haftar’s forces. They’ve lost strongholds in western Libya after battling for more than a year to seize the capital, Tripoli, from the United Nations-backed government of Fayez al-Sarraj. Haftar accepted an Egyptian-sponsored cease-fire over the weekend, although Sarraj’s administration said Sunday its fighters will continue their offensive to retake two key cities before any political negotiations.
Haftar’s supporters have blockaded major oil fields and ports since January, cutting output in the North African nation from as much as 1.2 million barrels a day to just 90,000 barrels. Libya holds Africa’s largest proven crude reserves, and the collapse in its production has had the inadvertent effect of helping the OPEC+ alliance prop up oil prices following a rout in March and April.
Sharara is run as a joint venture between the NOC and Total SA, Repsol SA, OMV AG and Equinor ASA.
“We hope that the restart of production at the Sharara oil field will be a first step to reviving the Libyan oil and gas sector and preventing an economic collapse in Libya in these difficult times,” NOC Chairman Mustafa Sanalla said in the statement.
The cease-fire and an initiative to permanently end hostilities were announced Saturday at a ceremony in Cairo that Haftar, Egyptian President Abdel Fattah El-Sisi and Libyan parliament speaker Aguileh Saleh attended. However, the interior minister in Tripoli, Fathi Bashagha, told Bloomberg on Sunday that its military is first aiming to retake the cities of Sirte and Juffra.
(Updates with NOC comment from second paragraph.)
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