Libya’s National Oil Corp. (NOC) said it’s in talks with regional countries and the Government of National of Accord under the supervision of the UN and the US to restart its oil output.

A spokesman at NOC confirmed on June 29 that it has been conducting ongoing negotiations with international parties over the past several weeks and is determined that it will forge a transparent agreement.
“We are hopeful that those regional countries will lift the blockade and allow us to resume our work for the benefit of all the Libyan people,” the spokesperson said.

Libyan crude production is currently as low as 70,000-80,000 b/d, less than a tenth of levels before Jan. 18, when an oil port blockade began thwarting the country’s crude output.

“The corporation also intends the agreement will include solutions to protect the oil facilities and make sure they are never used as a military target or a political bargaining chip again,” the spokesperson added.

The civil conflict between the UN-backed GNA and the self-styled Libyan National Army escalated in recent months, with Libya’s oil and gas facilities caught up in the dispute.

The GNA has recently gained ground against the LNA led by Khalifa Haftar, which has halted the latter’s offensive into Tripoli. The GNA has been striving to move eastward toward the oil-rich Sirte Basin into the eastern stronghold of the LNA.

Deal prospects
Hamish Kinnear, a MENA analyst at Verisk Maplecroft, said both sides would be keen for a deal as it would help them avoid more military confrontation.

“The deal makes sense, as LNA/Haftar allowing the reopening of ports – and appearing magnanimous in the process – would allow it to avoid a potentially disastrous military confrontation with the GNA/Turkey where it could very well lose the oil crescent,” he said.

“A GNA/Turkish offensive on Sirte/Jufra is looking like an increasingly complicated prospect now that the Russian mercenaries are more entrenched and with the threat of Egyptian military intervention,” Kinnear said.

Last week, the chairman of NOC, Mustafa Sanalla, acknowledged that many countries were benefiting from the absence of Libyan oil from global markets, accusing them of preventing the North African producer from restarting production.

Sanalla also said he was deeply concerned by the presence of Russian and other foreign mercenaries, who had recently entered the 300,000 b/d Sharara field to meet with the petroleum facilities guards.

Libya’s civil war has recently resembled more of a proxy war, with many foreign countries involved.

The GNA is backed by Turkey and Qatar while the LNA is supported by Russia, Egypt, the UAE and Saudi Arabia.

 

Source: Platts

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