Libya’s NOC sets sights on 1.5 mil b/d oil output target in 2020
Libya’s main oil chief has set his sights on boosting oil production to 1.50 million b/d in 2020 from current levels of 1.25 million b/d, as the country’s oil production and exports have been largely unaffected this year despite the civil unrest engulfing the North African country.
Mustafa Sanalla, the head of state-owned National Oil Corporation, said late-Wednesday the rise assumes 350,000b/d of new output coming online next year, but that this will be slightly offset by a natural decline rate of 7%-8%.
Output has remained much below 1.6 million b/d since 2011 when the country descended into civil war that led tothe downfall of the Muamar Gadhafi regime.
The last time the country produced 1.50 million b/d was October 2012, according to S&P Global Platts data.
Sanalla, speaking at an event in Tunis, said the increase will be mainly achieved through workovers on existingwells, infill drilling and rectifying technical and operational issues, all of which will cost around $1.2 billion.
The country is embroiled in a protracted conflict as the Libyan National Army have clashed regularly with forces loyal to the UN-backed Government of National Accord in Tripoli and other militia groups in the past nine months.
AMBITIOUS LONG-TERM TARGETS
Longer term, Sanalla hopes to raise oil production to 2.1 million b/d and gas output to 3.5 Bcf/d.
To meet this ambitious target, NOC aims to increase the production plateau, which will add nearly 460,000 b/d of oil while the reinstatement of damaged fields will add 120,000 b/d.
“Reactivation of shut-in wells … will add 150,000 b/d; and an increase in power generation at some fields … will add 125,000 b/d,” Sanalla said.
Libya’s crude output averaged 1.04 million b/d in January-October, compared with 948,333 b/d in 2018 and 807,500 b/d in 2017, according to the S&P Global Platts OPEC survey.
Despite significant security challenges, oil revenues in 2019 are expected to be more than $20 billion, Sanallaadded.
NOC transferred $24.4 billion to the Libyan Central Bank in 2018 with an average production level of 1.1 million b/d, according to official data.
Despite the conflict, oil output in Libya has been rising and exports have been largely unchanged.
One of the main reasons for this is because almost all of Libya’s key oil terminals and infrastructure, especially those in the east of the country, are already controlled by the LNA.
But the recent escalation in violence, especially in Tripoli and Misrata, has again raised the risk of oil supply outages.
Sanalla has repeatedly warned that the state of lawlessness in Libya stemming from the ongoing conflict could seriously impact its oil sector operations.
NOC’s efforts will focus on creating a “4D security plan based on transparency, community engagement and fighting against fuel smuggling or any possible sources of revenues for criminal armed groups,” he said.
Sanalla also wants to create a fund for oil-hosting areas that would be directly linked to oil production to meet the grievances of the communities and protect its fields and infrastructure from all-too-frequent attacks and sabotage.
“This will be designed to promote a more diversified economy and improve community services,” he added.
The Libyan oil industry has been at the mercy of groups vying for control of valuable assets, with armed attacks on key pipelines and production facilities since the 2011 civil war.