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Libya needs big increase in spending to promote oil revenue

Sanalla: NOC is suffering because of the debts of the 10s of millions of dollars for international companies - Internet


The head of the National Oil Corporation (NOC), Mustafa Sanalla, told Reuters news agency that Libya’s plans to increase its oil production up to five times of the current production would succeed by the end of this year, so the Libyan Government can allocate budgets to reform the petroleum infrastructure.

According to Reuters, Sanalla said that “if we receive about one Billion US Dollars we will do many things,” adding that the NOC presented its budget to the Presidential Council (PC) of the Government of National Accord (GNA) on 3 July and still waiting for the liquidity of money.

The Libyan oil production dropped down to 207 thousand barrels a day this week after it was 1.6 million bpd before the start of the civil war.

Libya depends on only the oil revenues to face the severe crises to cover its expenditure and the liquidity problems, because of the interruptions in oil exports. However, Sanalla said that the money, which will go to the NOC would increase the incomes to the country through increasing oil exports.

The NOC is preparing to unify its two sides, the one of Tripoli in the west and the one of Al-Baida in the east so that it can increase the oil production to 900 thousand barrels a day by the end of this year, and then to 1.2 million barrels a day in one year. But the NOC is facing security problems and liquidity crisis.

Sanalla said that the energy storage in the oil ports, which is a significant factor in exporting the oil, has dropped down to 750 thousand barrels from six million barrels because of the attacks on the oil ports and the civil war, as well as the severe attacks from the Islamic State (IS).

He added that the NOC is suffering because of the debts of the 10s of millions of dollars for international companies. He said that he warned earlier this week that clashes might happen between the Oil Facilities Guards (OFG) and the Army affiliated to the Interim Government in the East, which will cause more damages in the oil infrastructure.

He said that the NOC is suffering a debt of about 80 million dollars for one oil services company only.

Sanalla stated that the companies are thinking to end their activities in Libya, but they decided to stay after we met them because they are working in Libya since 50 years ago.

He added that unifying the two parts of the NOC will bring us good results. Sanalla plans for visiting the city of Benghazi in the coming two weeks, confirming that there is a clear support from the International Community and the Western powers for the NOC, which will help the different factions in consensus. He said that the International Community recognize the NOC as a neutral institution that works for unifying and saving the country.

Sanalla said that it is still not safe to send reforming groups to Al-Sedra and Ras Lanuf, the main two ports that would be opened according to the latest agreement with the Oil Facilities Guards (OFG).

Then he added that Al-Sharara and Al-Feel oil ports are able to add 200 thousand barrels a day to the oil production.