Libya's Oil Supremo Expects Output to Reach Qaddafi-Era Levels
(Bloomberg) -- Libya, one of the most volatile and politically fragmented oil producers, expects to pump as much crude by the end of next year as it did before the 2011 revolt against former strongman Moammar Al Qaddafi.
The country plans to refurbish its pipeline network and raise output at some fields to reach a target of 1.6 million barrels a day, National Oil Corp. Chairman Mustafa Sanalla said in an interview. The North African nation currently pumps 1.25 million barrels a day, he said in the eastern city of Benghazi.
“We’ve put together a plan to boost field production, including pipeline maintenance and addition of new pipelines,” Sanalla said. “We aim to reach 1.6 million barrels a day by the end of next year, and this level can increase.”
If it reaches this target, Libya would be producing at the level it last maintained in the years before Qaddafi’s ouster and death and the nation’s ensuing civil war. Political divisions and internal fighting have plagued Libya since then. While NOC officials have sought to increase oil and natural gas output, security issues and lawlessness continue to threaten the country’s energy revival.
Oil prices have climbed 15 percent this year, partly because of disruptions in Libya. Brent crude, the global benchmark, rose 0.6 percent to $76.63 a barrel at 5:55 p.m. in Dubai.
Sanalla spoke Wednesday on the sidelines of an oil conference in the country’s second-largest city. The gathering was unusual because Libya has held most of its oil-related events outside the country in recent years due to security concerns. The NOC had planned the Benghazi event for early October but postponed it for two weeks after Islamic State militants attacked its headquarters in the capital Tripoli.
The location of the three-day conference is significant because Benghazi is home to a parallel Libyan government that’s not recognized internationally. This administration sponsors a separate oil business that was at the heart of a standoff with Sanalla’s Tripoli-based NOC. The feud led in June to a halt of oil shipments from key ports in eastern Libya, where a weak economy has stoked anger among residents who think too much wealth is concentrated in the west of the country.
The NOC held a board meeting in Benghazi on Thursday for the first time in “several years,” it said on its website. The selection “confirms the return of security and stability at this ancient city."
Sanalla struck a conciliatory tone in his opening speech on Wednesday. “I would like to use this opportunity to stress the importance of transparency to ensure the fair distribution of oil revenues across the country. Every Libyan citizen has the right to see how every dinar of their oil wealth is spent,” he said, according to the NOC’s website.
Libya’s oil production has risen from 660,000 barrels a day in July, and the increase is helping to offset the impact on global crude supplies from an economic crisis in Venezuela and impending U.S. sanctions on Iran. Libya last pumped 1.6 million barrels a day in July 2012, when production surged briefly during a lull in fighting.
BP Plc and Eni SpA could restart work on a project in the first quarter of next year, setting the stage for Libya to ramp up production by “hundreds of thousands of barrels” a day, Sanalla said in a separate interview over the weekend.
In other developments:
- Arabian Gulf Oil Co., an NOC unit known as Agoco, expects to raise production by a third, to 400,000 barrels a day, by the end of 2019, the company’s Chairman Mohamed ben Shatwan said at the conference. Agoco’s goal is 500,000 barrels a day, he said, without specifying a date.
- Mellitah Oil & Gas, a venture between Eni and the NOC, targets an output boost to 240,000 barrels a day by the end of next year from 170,000 barrels a day now, according to a person with knowledge of the matter.
- Another NOC unit, Zalaf Oil & Gas Exploration & Production Co., expects to start pumping at a level of 5,000 barrels a day next year, with a goal of 50,000 barrels a day, the company’s Chairman Khalifa Rajab said at the conference. He gave no date for the target.
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