Oil & Gas Libya’s state oil firm needs $17bn to increase output By Reuters November 28, 2023 Reuters/Essam Al-Sudani Oil production represents approximately 90% of Libya's economy Libya’s state oil firm, the National Oil Corporation (NOC), needs a budget of $17 billion to increase national oil output to 2 million barrels per day in three to five years, its chairman, Farhat Bengdara said in an interview. Bengdara told Alwasat TV on Sunday that there were no obstacles to increase the output but “there is a lack of funding, not in the way it should be.” The NOC has a plan that includes projects stabilising production and maintaining pipelines and equipment, and projects for increasing production, Bengdara said. Libya reopens oil ports after hurricane and flooding fears Geopolitical risk will shape next twist in crude oil prices Europe looks to a divided Libya to ease energy crisis The main projects that would help to increase national oil output are related to maintaining the pipelines that were installed in the 1960s, he said. “These pipelines have expired and must be replaced,” Bengdara said, and the issue was the company’s “greatest challenge.” “We promised to reach 1.3 million bpd and we have reached 1.295 million bpd before the end of the year. But we are talking about infrastructure that was built in the 1960s and had never been maintained,” Bengdara said. Oil production is Libya’s main economic source, and it represents approximately 90 percent of the economy of the entire country. However, the political division between two administrations vying for power in the east and west casts a shadow over the possibility of investing more to raise production in Libya, particularly after general elections to unify the rival parties in 2022 failed despite UN efforts. The rival factions have repeatedly argued over the control of oil production and revenue, arguments which fuel the political chaos and threaten to undermine the peace process. Data published by the Central Bank shows exceptional financial arrangements have been referred with a value of approximately nine billion Libyan dinars, some $1.8 billion, to NOC during the first 10 months of this year. Bengdara said there was support from the Government of National Unity (GNU) and the central bank. The government approved a project aimed at replacing pipelines that flow from fields in the Oasis and Sirt Gulf basin to Es Sidra and Ras Lanuf ports. “We also have a project to replace a part of the eroded pipelines from the Messla and Sarir fields to the port of Hariga, and another project of a line from El Sharara field to the port of Mellitah,” he said. Since the fall of Muammar Gaddafi in the Nato-backed uprising in 2011, oil production has been repeatedly hit in Libya, an Opec member and third largest producer in North Africa by groups blocking facilities, sometimes to demand material benefits but also as a tactic to achieve wider political ends. “We lost 70 per cent of our storage capacity due to wars,” Bengdara said. He said the plan was supposed to lead the country to two million bpd “if there are no problems or developments beyond our control.” Bengdara, a central bank governor before 2011, was appointed as the NOC chief in July, 2022 by the GNU, replacing Mustafa Sanallah, who led the company since 2014.