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Libya Not Producing Enough Oil for Own Needs

Libya Not Producing Enough Oil for Own NeedsLibya Not Producing Enough Oil for Own Needs

Libya's oil output cannot even cover its own needs, the National Oil Corp (NOC) said on Monday, as the country struggles with fighting and protests that have hampered production since the 2011 ouster of leader Muammar Gaddafi.

Fighting already affecting two major oil-exporting ports in the east of the country has spread west close to the port of Mellitah, operated by a joint venture between the NOC and Italy's ENI, the state-run NOC said, Rigzone reported.

"Crude production of the state of Libya has fallen to very low levels which will not meet local demand," NOC said, without providing an output figure. OPEC member Libya produced about 1.65 million barrels of crude oil a day the year before Gaddafi's ouster, consuming about 330,000 per day domestically, according to data from the US Energy Information Administration.

The eastern ports Es Sider and Ras Lanuf stopped working more than a week ago due to nearby clashes, slashing Libya's oil output by at least 300,000 barrels a day and prompting the NOC to declare force majeure. A group called Libya Dawn seized the capital Tripoli in August, forcing Libya's internationally recognized government under Prime Minister Abdullah al-Thinni to relocate to the east.

 New Payment System

Libya's internationally recognized government aims to set up a new payment system to receive oil revenues, bypassing the central bank based in Tripoli, the capital city that is no longer under its control, its top oil official said.

Last month, Thinni named Al Mabrook Abu Seif as head of NOC after the rival government appointed its own oil minister to work in the company's headquarters in Tripoli. In an attempt to prevent oil revenues reaching the rival side, Thinni's government aims to set up a system for foreign oil buyers routed through an eastern branch of the central bank, Abu Seif said in a telephone interview.

"We've discussed this with the prime minister and the president of the House of Representatives and central bank head ... (Ali Salem) Hibri," he said, referring to the man appointed by the Thinni-allied parliament after it voted to fire Sadiq Al Kabir who is still acting as governor. Thinni's government also plans to make changes at the top of NOC but will not set up its own, separate oil firm, he said, even though officials based in the east have difficulties maintaining contact with NOC staff in Tripoli.

The central bank is currently keeping oil revenues in its coffers, with the exception of civil servants' salaries and food subsidies, in an attempt to stay out of the fray. But a struggle for oil revenues is likely to intensify as both governments will need a new budget from 2015.

 

Financialtribune.com