September 29, 2016 / 2:17 PM / 10 months ago

UPDATE 2-Libya AGOCO says output at 290,000 bpd, aims for 350,000 by year end

4 Min Read

(Adds details from AGOCO chairman)

By Ayman al-Warfalli

BENGHAZI, Libya Sept 29 (Reuters) - Libya's Arabian Gulf Oil Company (AGOCO) has increased production to 290,000 barrels per day, its chairman said on Thursday, and hopes to reach 350,000 bpd by the end of the year.

AGOCO, a subsidiary of the National Oil Corporation (NOC) that operates mainly in eastern Libya, has boosted its output from about 150,000 bpd since military commander Khalifa Haftar took control of some of the country's main oil terminals from a rival force on Sept. 11-12.

Following the takeover, the NOC opened three previously blockaded ports. On Thursday an official at one of the ports, Zueitina, said a tanker had entered to load 570,000 barrels of crude to take to Zawiya refinery in western Libya.

Clashes, protests and political disputes slashed Libya's oil output to a fraction of former levels. The OPEC member was producing about 1.6 million bpd before the 2011 uprising that toppled long-time leader Muammar Gaddafi.

NOC Chairman Mustafa Sanalla has said he hopes the opening of the ports can be a turning point. But major pipelines in western Libya are still blockaded and Libya remains politically and militarily divided.

Ibrahim Alawami, head of the NOC's measurement department, said on Thursday national production was between 450,000 and 490,000 bpd and would rise to about 500,000 bpd by the end of the month.

AGOCO Chairman Mohamed Shatwan told Reuters the company's production should reach 300,000 bpd in the coming days, barring any technical problems, adding a further 50,000 bpd by the end of 2016.

"We have an ambitious plan under which it is possible after a period to reach 400,000 bpd," he added, saying it might take up to two years to achieve that goal.

Damage to AGOCO's fields from militant attacks over the past two years was limited, he said.

Of AGOCO's five major fields Bayda remains shut because of a technical problem at Ras Lanuf, and production at Nafoura is limited to 22,000 bpd, about half of its capacity, because maintenance work and parts are needed, said Shatwan. A storage tank in Messla field that was damaged in 2011 has remained unrepaired because of the evacuation of foreign workers.

"We ask on this occasion that foreign companies return to work and carry out operations to check security, and if they do not return we will have to find another solution," he said.

Of the ports seized by Hangar's forces, Zueitina had been closed since late last year, while Ras Lanuf and Es Sider ports had been shut since 2014. The first tankers docked at Ras Lanuf last week, but Es Sider, badly damaged in fighting, needs repairs before exports can resume.

Exports have continued at a reduced level at Brega, the fourth port now under Haftar's control.

Hariga terminal in the far east of Libya, which is operated by AGOCO, has kept working relatively smoothly. Shatwan said 56 or 57 tankers had loaded there so far this year, compared to 90 tankers during the whole of 2015. (Additional reporting by Ahmed Elumami; Writing by Aidan Lewis; editing by Patrick Markey and Tom Brown)

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