Libya may be able to maintain its current level of oil production of around 1.2 million barrels per day (bpd) until the end of the year as the oil sector is finally receiving enough funding for field maintenance and development, Libya’s Oil Minister Mohamed Oun told Bloomberg in an interview.
Oun was sworn in as the first oil minister of the country since 2014 as the new Libyan unity government took office earlier this month. The new cabinet is the first unity government of the war-torn country since 2014, and could potentially pave the way to more stability in oil production in the African OPEC member, which is exempted from the OPEC+ cuts.
The government has now approved a budget of US$1.6 billion to the National Oil Corporation (NOC), the largest recipient of Libya’s development budget, according to Bloomberg.
“There is a reasonable allotment of funds for oil-sector activities,” Oun told Bloomberg, noting that the funds could be enough for the needs of the oil sector for the rest of this year.
Apart from frequent blockades of oil ports amid the fighting, Libya’s oil production has suffered in recent years from a chronic lack of funds to NOC for oilfield development and infrastructure maintenance.
This has led to volatile production volumes from Libya, which is exempted from the OPEC+ cuts due to its fragile security situation. A more stable level of production, however, could mess with the OPEC+ plans to manage oil supply this year.
When the alliance announced the massive cuts in April 2020, Libya was pumping less than 100,000 bpd, and its oil export terminals were blocked by the self-styled Libyan National Army (LNA) of General Khalifa Haftar. The blockade ended in September, and Libya has managed to quickly restore its production to the pre-blockade levels, surprising many analysts.
Days before Libya’s unity government was sworn in, NOC’s chairman Mustafa Sanalla told Bloomberg Television that the country planned to raise its oil production to 1.45 million bpd by the end of this year.