$2.5bn Investment needed to hit 800,000 bpd

By John Lee.

The chairman of Libya’s National Oil Corporation (NOC) has said that $2.5 billion must be invested to raise its crude oil production to 800,000 bpd next year, from around 590,000 bpd currently.

Mustafa Sanalla, speaking on Tuesday following talks in London, said Libyan production of crude oil had increased from around 290,000 bpd in mid-September to around 590,000 bpd now, compared with 1.5 million bpd after the revolution.

Sanalla said he was hopeful production would continue to increase in 2017, but this would depend on three major factors:

First, the ports and pipelines that are currently open must stay open; second, the blockade of the Riyayna pipeline must be lifted; and third, NOC’s budgetary requirements must be met.”

“If these conditions are met, we expect that next year we will increase NOC’s share (NOC Partners share not included ) of production to 800,000 bpd of crude oil and 2,750 MMSCFD of gas.

"Assuming a Brent oil price of $45 a barrel for most of next year, plus ancillary revenue from petrochemicals and oil products, this will generate revenue for the country of $15.847 billion.

However, if NOC’s budgetary requirements are not met, crude oil production will be only 520,000 bpd ( NOC share only ), earning revenues of $11.72 billion, Sanalla said.

Our budget for 2017 includes investment and running costs of $2.5 billion. This will generate $4.125 billion in increased revenue (NOC share), and result in increased production, which will be carried forward into future years. Therefore, I do not believe that the concerned parties can responsibly decide not to make these payments,” he said.

Sanalla added that reopening the Riyayna pipeline must be a national priority. “If NOC’s budget is paid in full, but the Riyayna pipeline remains blockaded, this will subtract 265,000 b/d from our production plan, and $4.5billion from our projected revenue in 2017,” he said.

Any economic benefit from increased oil production must be felt across the whole country, Sanalla said.

(Source: NOC)

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