Revenues on the rise for Libya

20 November 2018, Week 46, Issue 764

Libya’s National Oil Corp. (NOC) reported earnings of US$1.66 billion for the month of September, an increase of US$93 million over August. Data on the NOC website said income came from sales of crude oil and derived products, in addition to taxes and royalties received from concession contracts.

During February, March, May and July of this year, NOC’s earnings were over US$2 billion each month, according to company data. NOC reported its year-to-date earnings at US$16.894 billion.

The state-owned company’s statement also said natural gas was being produced and delivered through the coastal pipeline to feed the local market, with remaining quantities sent for export. Libya exports gas to Italy through the Greenstream pipeline. Eni is working to expand output from the offshore Bahr Essalam gas field by the end of the year. BP is also planning new offshore exploration work in early 2019. 

The company went on to report production was averaging 1.28 million bpd, more than that produced in June when some the export terminals in Libya’s ‘oil crescent’ were closed during fighting between the Libyan National Army (LNA), headed by General Khalifa Hifter, and a militia headed by a former commander of the Petroleum Facilities Guard (PFG), Ibrahim Jathran. 

Libya’s export terminals are now back under control of NOC, enabling production to rise by 500,000 bpd. Before the 2011 revolution, Libya was producing around 1.6 million bpd. 

NOC’s chairman, Mustafa Sanalla, last week met Saudi Arabian Energy Minister Khalid al-Falih to discuss Libyan oil production and OPEC’s overall situation regarding the oil market and falling prices. Falih is reported to have welcomed Libya’s return to “good production levels” but the two also discussed plans for future co-operation between OPEC and non-OPEC producers in the face of an over-supplied oil market.

OPEC will meet in Vienna in early December to discuss a possible new cut in oil production. Saudi Arabia stepped up production in response to new US sanctions against Iran, but the calculations appear to have been wrong, resulting in a surplus of crude on the market and a drop in oil prices. 

Libya was previously exempted from oil reductions because of its unstable situation, but as production is now averaging over 1 million bpd, it may face some pressure to curtail output. 

Edited by

Ed Reed


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