Libya to increase oil production to 1.5 million by year end, needs LD 7 billion budget – delayed 2021 budget will hinder development

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Posted – 05th June 2021

Libya’s Oil Minister Mohamed Aoun said Libya’s oil production before the 2011 revolution had reached an estimated at 1.7 million barrels per day (bpd), and that the National Oil Corporation (NOC) plans to reach 1.5 bpd by the end of this year.

NOC revenue will be released to CBL as normal after unified government

He said the agreement to withhold oil revenues from the outgoing government in the NOC’s Libyan Foreign Bank was between the then conflicting parties and to try to speed up the arrival of a unified government, which is what happened, but now the system will return to how it used to be after the unified government was approved.

He revealed that about US$ 5 billion of the frozen funds were released and transferred to the Central Bank of Libya, and work is continuing to transfer the rest of it.

Exceptional budget for the NOC to help increase production

Debts accumulated on some of the NOC’s companies, so the former Presidential Council had issued a decision at the end of 2020 to allocate LD 1.048 billion on an exceptional basis to the NOC, but the Central Bank apparently saw in this a violation of the state’s financial law, given that the budget was issued by the House of Representatives. Its transfer was delayed and then the new unity government decided to transfer in coordination with the Central Bank, adding another LD one billion from the emergency clause to solve the debt problem.

2021 budget approval delay will harm projects and development spending

Minister Aoun said the delay in the approval of the 2020 budget will not stop state-sector salaries being paid. He explained that existing law allows the government to spend every month the equivalent of one twelfth of the previous year’s budget on salaries only, however, any delay in approving the budget will undoubtedly have a bad effect and lead to problems in management spending and stop projects. He noted that already 5 months of the year has passed without a budget and that only 7 months remained.

The change in exchange rate means the oil sector now needs LD 7 billion budget

The oil sector needs more than 7 billion in the budget, as the increase in the sector’s allocation in the budget is caused by the change in the exchange rate.

Damage to fields means they need large funds to restore infrastructure

The Oil Minister said the sector, in light of the severe damage to the infrastructure, needs huge funds, as there are fields that have been completely damaged, such as the Mabrouk, Zella, Al-Ghani and Al-Sabah fields, and they need investment and not operational expenses to restore them.

Oil Minister Aoun was speaking to Arabic language Libyan media outlet Fawasel last week.

LIBYA HERALD – Sami Zaptia

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