Libya plans oil sector reorganisation

28 November 2012

National Oil Corporation to be split into upstream and downstream arms

Libya’s Oil Ministry has proposed a major reorganisation of the country’s oil and gas sector, with state-owned National Oil Corporation (NOC) to be split into two separate bodies to be headquartered in the capital, Tripoli and Benghazi in the east of the country.

The Oil Ministry, led by Abdelbari al-Arusi who was appointed only this month, also plans to separate upstream activities from the downstream sector, according to a statement on the NOC website.

Exploration and production would remain in Tripoli, while refining and petrochemicals responsibilities would be transferred to a new company, The National Corporation for Oil Refining and Petrochemicals Industry, headquartered in Benghazi.

“[It] will oversee all companies operating in this area. It will launch projects and secure funding for them”, Al-Arusi said in the statement. The upstream company in Tripoli will be known as the National Corporation for the Exploration and Production of Oil and Gas. Both firms will have branches in Tripoli and Benghazi.

The proposal will now be considered by the government and then the 200-member General National Congress (GNC), Libya’s current parliament, before any action is taken.

NOC was formed in 1970 to take over from the Libyan General Petroleum Company, nationalising Libya’s oil assets from inception, after Muammar Qadaffi seized control on the country in a military coup. In 2006, then-Prime Minister Shokri Ghanem was appointed to the post of NOC chairman and was given responsibility for all aspects of the energy industry, along with the Energy Ministry that now came under the purview of NOC, consolidating control over the sector.

Before the 2011 conflict, the oil and gas sector was centrally controlled from Tripoli, although the majority of reserves and production are located in the Cyrenaica region in the East of Libya. The region has argued for federal rule to address the long-standing complaint that it has been deprived of a fair share of the country’s oil wealth.

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