Libya's Sirte Oil Restarted Natural Gas Fields -Oil Official

BENGHAZI (Dow Jones Newswires), Sep. 14, 2011

Libya's Sirte Oil Co. has restarted natural gas production at several fields among the largest in the country, a Libyan official at Benghazi said Wednesday, adding to faster-than-expected resumption in oil production following the fall of Moammar Gadhafi last month.

In an interview with Dow Jones Newswires, Kalid Kwafi, the acting head of the association of oil companies and employees of Benghazi, said state-owned Sirte Oil has restarted gas production in recent days at the Attahaddy and Hateiba fields in Eastern Libya, which will be used for local power generation.

After oil and gas production was reduced to a trickle when civil war erupted, both sides of the conflict were forced to rely on expensive fuel imports, with the rebels getting shipments from Vitol SA, to satisfy the needs of electricity plants.

The fuel imports "cost too much money" so the gas resumption means "no need for fuel" for power generation, Kwafi said.

Sirte describes Attahaddy and Hateiba as among the largest gas fields in Libya, with the former producing 270 million cubic feet a day in addition to 35,000 barrels a day of condensates. It's unclear how much Hateiba is producing. Until now, only the Eni-operated Wafa field was producing natural gas in Libya.

The news comes after the Arabian Gulf Oil Co., another state company operating in Eastern Libya, said Tuesday its production had reached 160,000 barrels a day, after starting output higher than planned and ahead of schedule.

The collapse of Libya's production of hydrocarbons--of which it holds the largest reserves in Africa--threw global energy markets into chaos earlier this year, leading Saudi Arabia to increase oil output unilaterally and consumers to draw on their emergency stockpiles.

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