Armed conflict between groups vying for control of Libya is putting the country’s lifeblood oil and gas industry at risk of almost total collapse, just as production is beginning to recover from years of war, the head of the country’s state oil company said Saturday.
Libya is currently pumping almost 1.3 million b/d, National Oil Corporation Chairman Mustafa Sanalla told reporters. While production and exports have so far been unaffected by the recent escalation in fighting between the self-styled Libyan National Army, forces loyal to the UN-backed government and other militia groups, the violence threatens to destroy oil fields and export infrastructure, he said.
“The war is back. The war should be stopped,” Sanalla told reporters, citing a rec”ent attack near the Zallah oil field in the Sirte Basin, about 750 km southeast of Tripoli. “The war should be stopped to keep production running.”
Sanalla had just arrived in Jeddah, Saudi Arabia, where he will attend an OPEC/non-OPEC monitoring committee meeting Sunday.
Sanalla said the violence was detrimental to NOC’s attempts to rebuild the oil sector. Oil and gas sales account for almost all of Libya’s revenues.
“Our aim is to attract the investment. This chaos is like you fire the investors, unfortunately,” he said. “If the situation will continue like this, I’m afraid that 95% of production will be lost.”
LNA forces last month began advancing on the capital Tripoli, shattering a tenuous peace that had allowed oil production to recover above 1 million b/d in March, according to S&P Global Platts estimates.
As well as a key oil exporter, Libya is also an important gas producer, with exports averaging 13.7 million cu/day so far this year, Platts estimates.
Some international oil companies, such as Eni, have already begun evacuating staff from Tripoli, due to the fighting, some of which is occurring close to key oil and gas infrastructure.
This is the latest threat to Libya’s oil and gas industry, which has been at the mercy of groups vying for control, with attacks on key pipelines and production facilities since the 2011 civil war.
Sanalla has said Libyan production could hit 1.4 million b/d this year, if security is maintained.