By Adam Nathan.
Mustafa Sanalla, the colourful chairman of Libya’s National Oil Corporation (NOC), has revealed ambitious plans to increase Libya’s oil production to 2.5 million barrels of oil a day by 2020.
Sanalla, also revealed plans to expand Libya’s refining capacity to 1 million barrels of oil a day and gas production to 1.3 million cubic feet a day.
Speaking at an investment event in London, Sanalla said oil production could be as high as 1.25 million barrels a day by the end of 2017, but that this would require foreign private investment and extra resources from the Libyan central bank to repair the damaged oil fields and ports.
However, Sanalla’s business plans for the NOC were criticised by some in the audience of the event – the Libyan Reconstruction & Investment Forum – with senior business leaders wondering at the economic sense of the state intervening in the secondary refining market.
“There is no need for the government to become involved in refining at this point at all,” said Husni Bey, Chairman of HB Group Holding and a well-known industrialist in Libya.
Sanalla also drew criticism at the event for not openly supporting the Government of National Accord (GNA) despite the allocation of 1.3 billion LD in this year’s budget and the GNA’s success in freeing up oil reserves in the western Zintan area of 300,000 barrels a day for the NOC.
Instead, Sanalla – who has clashed in the past with Prime Minister Fares Serraj of the GNA – chose to obliquely criticise the GNA in a wide-ranging Guardian newspaper interview, which appeared on the day of the conference, as an “illegitimate” government.
Sanalla, who sometimes operates with the security support of General Khalifa Haftar’s Libyan National Army (LNA), told the Guardian that the Libyan oil industry needed investment of between $100bn and $120bn, but it was struggling to get even operating costs from the Tripoli government.
One senior GNA source said: “Sanalla’s NOC has received a very significant amount of money in the 2017 budget even though salaries need to be paid and essential services such as health, water and electricity must be put first.” He added that Libya’s budget was based on 900,000 barrels of oil by mid-August at a price of $52 a barrel and was on target.
On Monday, a press statement from Libya’s House of Representatives (HoR) in Tobruk, claimed the investment forum was “legally invalid and places no obligations on the Libyan state”, echoing the words of Sanalla that the GNA is “illegitimate”.
Adam Nathan can be contacted at [email protected] and +44 7900 783662.
(Picture: Developing Markets Associates)