Libya's biggest oilfield, El Sharara, will reopen, after the head of the Government of National Accord (GNA), Fayez al-Sarraj, flew there to persuade protesters to end a blockage.
Production had not restarted yet as oil workers were waiting for orders from state oil firm NOC.
During his visit on Wednesday, Sarraj met with the representatives from the “Fezzan Rage Movement” and leaders from Battalion 30 affiliated with the oil facilities guards.
The Tripoli-based government had earlier announced a development fund worth 1 billion Libyan dinars ($717 million) for the long-neglected south in a bid to appease the protesters.
The GNA’s announcement came despite warnings made by NOC Chairman Mustafa Sanalla against paying a ransom to the “Fezzan Rage Movement” that had halted crude production at the country's largest oilfield.
NOC said the guards had facilitated the protest.
"Any attempt to pay a ransom to the group which shut down El Sharara (oilfield) would set a dangerous precedent that would threaten the recovery of the Libyan economy," Sanalla said in a statement last week.
The protesters had demanded better state services for the south, which produces around 400,000 bpd of day, but lacks basic facilities such as hospitals or electricity.
Sarraj’s visit Wednesday came as the US State Department announced in a statement that Washington “continues to monitor the situation at the Sharara oil field and supports the call for immediate and unconditional withdrawal of armed elements in the area, which is crucial to allow oil production for the benefit of all Libyans to resume.”
“We call on all parties to resolve issues through constructive dialogue and peaceful means in the spirit of compromise, rather than through threats of violence,” it said.