Backing of workers, communities key to Libya’s oil revival
SHARARA OIL FIELD, LIBYA: When the head of Libya’s state energy company visited Sharara oil field in early July, community leaders and workers crowded into a conference room to ask about jobs, training and services for local people.
When, they asked, would their villages start to see the benefit of the country’s rising oil production?
“You’ve been very patient,” Mustafa Sanalla reassured them, before adding: “You need to be patient a little longer.”
Libya’s National Oil Corporation (NOC) raised output to more than one million barrels per day (bpd) at the end of June for the first time since 2013, a feat that seemed near impossible after the chaos that followed the toppling of Muammar Gaddafi in 2011.
The NOC did it by cajoling community leaders, shaming blockaders and navigating a bewildering range of tribal feuds as it reopened fields and patched up infrastructure.
But the comeback, crucial to Libya’s survival, is fragile.
To keep it going, NOC chief Sanalla has to tour the country regularly, placating restive armed factions and local groups while at the same time tussling with the UN-backed government in Tripoli over budget and control over the oil sector.
Even if the NOC can continue to stop the port and field blockades that crippled Libya’s production in recent years, its goal of pushing production to 1.25 million bpd later this year will be difficult to achieve.
Output is already wavering due to problems linked to long shutdowns and a lack of maintenance and investment.
Idled pipelines have corroded, thieves have stolen copper wiring at desert oil facilities.
No new drilling has been done for three years and few foreign contractors have returned.
Funds to replace and maintain infrastructure are badly needed.
“Unless we have the money, not only can we not increase production, we cannot sustain production,” Sanalla told Reuters as he flew back from the visit to Sharara and another southwestern field called El Feel. “Until now we haven’t received one penny.”
Among the parties closely watching the situation is OPEC, which wants to bolster global oil prices.
OPEC exempted members Libya and Nigeria from a deal to cut output that took effect in January, but the group is now considering if and when quickly rising production should be capped.
Sanalla will share his production plans at a meeting of OPEC and non-OPEC oil producers in Russia on Saturday.
Libya has the biggest proven oil reserves in Africa. Before the uprising that killed Gaddafi, it was pumping around 1.6 million bpd, much of it light, sweet crude shipped to Europe.