Libya needs 40% rise in oil production to start economic recovery
Libya will have to raise by 40 percent its oil production—its major and almost exclusive foreign revenue stream—next year in order to meet its expenditures and start restoring the economy crippled by 10 years of civil war, Central Bank governor Sadiq Al-Kabir told Bloomberg in an interview published on Monday.
“[I]t is of course imperative that production rates in 2022 have to go higher,” said Al-Kabir of Libya’s oil output, which is around 1.3 million barrels per day (bpd) at present.
According to the central bank’s governor, the OPEC member currently exempted from the OPEC+ cuts has to raise its oil production to 1.8 million bpd in 2022.
Such production levels, if stable, could generate $35 billion in oil revenues for Libya in 2022 if oil prices average $60 a barrel, Al-Kabir told Bloomberg.
This year, amid relatively stable oil production (so far), Libya could generate $25 billion in oil revenues, the central bank’s governor said. This would be a major improvement from the $3.6 billion the country received in 2020 when its oil exports were offline for eight months due to a blockade of its oil export terminals.
Libya, however, could find it difficult to raise its oil production by that much.
The country could boost its oil production to 1.6 million bpd by the middle of 2022 if the industry has the necessary funding, Libya’s Oil Minister Mohamed Oun told Italian news agency, Agenzia Nova, in an interview published last month.
But lack of funds for restoration and maintenance of oil infrastructure, as well as a conflict brewing between the minister and the long-serving chairman of the National Oil Corporation (NOC), Mustafa Sanalla, could hamper Libya’s attempts to raise production to the 1.6-million-bpd level it last pumped under Muammar Gaddafi more than 10 years ago.
Oun has recommended to the government of national unity that it replace Sanalla in a board reshuffle, Argus reported last week, citing a Libyan source.