Libya will not be able to restore oil production to pre-crisis levels of 1.6 million b/d from less than 100,000 b/d now until three years after the end of hostilities, Edinburgh-based consultancy Wood Mackenzie said in a report released Monday.
Even then, Woodmac said, achieving pre-crisis production over a 36-month time frame would depend on the damage to oil infrastructure being limited, the swift removal of international sanctions and the timely return of international oil companies and foreign workers.
If the conflict is resolved by the end of this year, world oil markets could see substantial volumes of Libyan oil by late next year, Woodmac said, adding that any increase in production or resumption of exports is unlikely while the conflict continues.
"Substantial oil volumes could be back in the market by late 2012, if a resolution is achieved by the end of 2011. But the recovery period will extend if production remains shut in for longer, as infrastructure continues to deteriorate. There is unlikely to be any increase in production or restart of exports whilst Libya's oil infrastructure is open to sabotage by either side," it said.
If the conflict is "prolonged or continues in a different form, the resultant international isolation could keep oil production shut-in for many more years," Woodmac said.
"More optimistically, a new Libyan government may seek to utilize its oil and gas resources more effectively, for the benefit of the people. If this is to be achieved in a short time frame, Libya will have to look to partnerships with the international industry, who will bring finance, skills and technology to existing oil fields, which have the potential to produce up to 3 million b/d."
Wood Mackenzie said up to six months would be needed for National Oil Corporation staff, the international companies and foreign workers to return and re-establish supply lines and assess and repair damaged infrastructure.
KEY DETERMINANT
"The key determinant of the timescale will be the extent of damage to infrastructure. If major repairs are required, the restart of production could be pushed back by six months or more," it said.
It will take longer to restore production in the mature and complex Sirte basin in the east of the country than in the more modern and less complex fields of the Murzuk and Pelagian Shelf basins in the west, the report said.
Wells in the Murzuk and Pelagian Shelf basins could be producing at around 70% of pre-crisis production rates when re-opened, but older wells in Sirte might average only around 40%.
"The Murzuk fields are at an early stage of development with highly-productive sandstone reservoirs, in which production could return to peak rates within 1-3 months," it said.
By contrast, fields in the Sirte basin are older, with more complex reservoirs and other complications such as associated gas. "Production from these fields is typically supported by water and gas injection programs and many wells will likely require workovers. This could mean that the ramp-up phase is extended beyond 20 months."
