Libya’s Oil Sector Finally Getting Enough Funding, Minister Says
(Bloomberg) -- Libya’s energy industry is on track to get enough money from the government for the OPEC member to sustain its crude production throughout the year, according to the new oil and gas minister.
The country, which has been in civil war for about a decade, swore in its first unity government in about seven years this month. Politicians also approved a budget that allocates $1.6 billion -- the biggest portion of development spending -- to the state oil company.
“There is a reasonable allotment of funds for oil-sector activities,” Mohamed Oun, who was appointed Libya’s first oil minister since 2014, said in an interview. “We believe it may suffice for the remaining 10 months of 2021.”
The National Oil Corp. is set to get one third of total development spending in the new budget, according to a copy seen by Bloomberg. The rehabilitation of the energy sector -- Africa’s largest in terms of oil reserves -- is a priority for the government after the conflict left ports, pipelines and fields damaged or neglected.
After a blockade in early 2020, the country’s crude output slowed to nothing before September, around when warring sides reached a truce and halted fighting. It’s now about 1.2 million barrels a day, Oun said.
The NOC has long complained it needs more money to fix infrastructure. Its chairman, Mustafa Sanalla, said production could rise to 1.45 million barrels this year and to 1.6 million within two years, if the company gets enough funding.
The ministry will provide “the needed governmental, financial and logistical support” to the NOC, Oun said.
The unity government is meant to lead Libya until elections scheduled for December. Despite the truce, much of the country is still under the control of well-armed militias and thousands of foreign mercenaries are yet to leave.
“There are several matters that need to be resolved,” Oun said. Important issues include security at oil fields, re-activating wells and upgrading pipelines, he said.
Still, he doubts fighting will resume.
“We do not foresee or plan on war in our country,” he said. “Our people have had enough conflicts and wars.”
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