Libya to open oil sector to foreign investment

25 January 2017

Aims for 1 million barrels a day production by April

Libya is planning to reopen its oil sector for overseas investments, according to the chairman of its national oil company, after years of war and political instability as left its energy assets in disrepair.

National Oil Corporation (NOC) Chairman Mustafa Sanallah said at an energy conference in London on 24 January that Libya was aiming to boost oil production to 1 million b/d by April and 1.25 million b/d by the end of the year.

Libya’s oil production reached a three-year high of 708,000 b/d in early January. The North African country was aiming to increase production to 900,000 b/d by the end of 2016.

Despite missing this target, Libya has boosted production significantly from about 260,000 b/d in August 2016 as it reopened export terminals on the Mediterranean Sea.

NOC is now looking to welcome foreign oil companies to invest in its oil sector for the first time since freezing new overseas investment in 2011 during the civil war.

“We cannot stand back and do nothing while the state disintegrates,” the Wall Street Journal quoted Sanallah saying in London. He said he had been waiting for a “legitimate government with a mandate from the people to come to power” before allowing foreign investment but this had yet to happen.

Output has increased since a deal was reached with military commander Khalifa Haftar, whose forces have taken control of oil export terminals on the Mediterranean coast.

Sanallah said he wants Libyan oil production to return to its pre-war level of 1.6 million b/d by 2022 with the help of foreign investment.

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