The Chairman of the National Oil Corporation (NOC), Mustafa Sanalla, said on Monday that delays by The Financial Arrangements Committee of the Presidency Council in making budget funds available to the corporation are costing Libya billions of dollars in lost revenue and that these delays need to be explained to the Libyan people.
“The Financial Arrangements Committee of the Presidency Council needs to explain the delay because every day our country loses over US$10 million because of the shortfall, and that is money we will never recover.”
According to NOC calculations, budget shortfalls at NOC have caused production losses at the Arabian Gulf Oil Company (AGOCO) and Sirte Oil Company (SOC) fields totalling 35 million barrels, or 229,000 barrels per day, valued at US$1.56 billion, since the Presidency Council took control of spending in March.
“Let me make one thing very clear: blocking payments to NOC is harming the Libyan people,” said Eng. Sanalla. “The money is there. The treasury would recover its investment in two to three months, as well as almost double its income. Any business-minded person would call this a no-brainer. The Financial Arrangements Committee needs to explain its decision-making to the Libyan people.”
“We are running a tremendous budget deficit. We have an opportunity to close that deficit substantially. Why are we not taking it?”
“There is another aspect of this that the public and the politicians need to understand. Systemic underinvestment, combined with the blockades on our major oil fields, is going to impose enormous costs on the oil sector in future to recover lost capacity. Because of changes in the reservoirs, some oil is going to be lost to us forever. We have a very long to-do list once stability is restored. Investment in Oil sector needs to be competently managed and I believe there should be accountability for actions that directly harm the Libyan economy.”