September 6, 2017 / 3:36 PM / 17 days ago

UPDATE 3-Oil production restarting at Libya's Sharara field after blockade lifted - sources

(Adds lifting of force majeure at Zawiya terminal)

By Aidan Lewis and Ahmad Ghaddar

TUNIS/LONDON, Sept 6 (Reuters) - Oil production at Libya’s Sharara field, the country’s largest, was resuming on Wednesday after a valve was reopened on a pipeline shut by an armed group for more than two weeks, Libyan oil industry sources said.

“We have just started, little by little,” said one source at the field, who asked not to be named. He said it would likely take three to four days for production to reach normal levels.

Sharara had been producing up to about 280,000 barrels per day (bpd) until it was forced to shut on Aug. 19.

The blockade on the pipeline leading from the field to the Zawiya terminal on Libya’s Mediterranean coast was lifted on Tuesday, with the reopening of a valve near the western town of Zintan.

The National Oil Corporation (NOC) lifted a force majeure declaration on loadings of Sharara crude at Zawiya on Wednesday after the field reopened.

Sharara resumed production in December after a two-year blockade of the pipeline, also near Zintan, and has been key to a recovery in Libya’s national output to about 1 million bpd, about four times its level in mid 2016.

The source at the field said maintenance was needed as production resumed, and that some damage had been caused by the closure.

A second source said production could restart quickly once checks were made. “Usually pumping starts after they do some tests to make sure it is okay,” he said.

Foreign workers who had been temporarily evacuated returned to Sharara on Wednesday morning, according to an engineer at the field.

Libya is exempt from an OPEC-led pact to curb global oil production and the revival in its output has complicated the bloc’s efforts to defend prices. The NOC has said it hopes to raise production to 1.25 million bpd later this year.

However, production remains at risk from blockades, budget constraints and political turmoil.

Sharara has suffered repeated temporary shutdowns this year because of protests and the actions of armed groups near the field and along the pipeline leading north.

The NOC blamed the latest shut-down at Sharara on a rogue militia which it said was also responsible for closures at the El Feel and Hamada fields. El Feel and Hamada were subsequently re-opened.

Sharara is operated by the NOC in a joint venture with foreign oil companies Repsol, Total, Statoil and OMV.

The NOC said last week it had referred the names of two militia leaders to Libya’s general prosecutor over the shutdowns. The armed group was trying to secure the release of a relative jailed for alleged kidnapping in Tripoli, according to industry sources, though other demands were also made.

It was not clear on what terms the blockade of the Sharara pipeline was lifted. The U.N.-backed government in Tripoli did not respond to a request for comment. (Additional reporting by Ayman al-Warfalli and Julia Payne; Writing by Aidan Lewis; Editing by Greg Mahlich)

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