The Address | Benghazi – Libya
ABU DHABI – Libya needs up to $60 billion in investment to revive its energy industry, with $40bn required to raise refining capacity to a million barrels per day, with the remainder being channelled over the next five years in development of upstream infrastructure, the chairman of Libya’s National Oil Corporation (NOC).
“For the next five years $20bn is required for downstream we have to validate the study with Wood Group. So total requirement would be $60bn,” Mustafa Sanalla the head of Libya’s NOC told The National in an interview in Abu Dhabi.
Talks are underway with the UK energy services firm Wood Group to prepare a study on overhauling the country’s refining assets, with plans for grassroots integrated refining and petrochemicals plants, Mr Sanalla said.
Libya, which has some of the cheapest, largely sweet oil in northern Africa, has seen much of its production remain offline during the bloody civil war that erupted between rival factions following the downfall of Muammar Qaddafi in 2011. Production, which had remained at about 1.75 million bpd then fell by 850,000 bpd over the succeeding years as protests and blockades prevented export of crude via the the country’s key port terminals.
However, following the handover of key Libyan ports Ras Lanuf, Es Sider, Zueitina and Hariga in June, by the Libyan National Army (LNA) after removing militias that had blocked the oil exports for years, Libya has managed to get more crude to the markets, with current production in the range of 1.2 to 1.3 million bpd, according to Mr Sanalla. Production has averaged a million bpd for this year, a figure that Mr Sanalla hopes to raise to two million bpd in four year’s time.
“By 2022 we are going to have more than two million bpd of oil, and more three billion standard cubic feet of gas, so we need a total of $20bn for the next five years, so this [is going] to increase production,” he added.
The investment would be channeled into the rehabilitation of oil fields, particularly the damaged ones, which have taken around 150,000 bpd offline, he said.
“We could add more than hundreds of thousands of barrels per day if we do some repair on pumps, generators,” said Mr Sanalla.
Libya’s state-backed producer, which received revenues from its hydrocarbons assets – including from the eastern provinces – of $1.66bn in September said revenues for the first nine months of the year totalled nearly $17bn.
“Last year’s total was $13bn and the year before only $4bn,” he said, adding, “This is for the whole of Libya’s oil, gas, petrochemicals, royalties and taxation.”