Libya Says Oil Sector Open Again for Business
25 January 2017 - 2:09AM
Dow Jones News
By Benoit Faucon
LONDON--Libya intends to reopen its oil sector to new foreign
investments, its state-run oil company's chief said Tuesday, a move
that would give oil companies the opportunity to develop the
largest petroleum reserves in Africa for the first time in five
years.
Libya froze all new foreign investment in 2011 after the civil
war that toppled strongman Moammar Gadhafi. International oil
companies such as Total SA of France and ConocoPhillips have long
had operations in Libya, and Eni SpA of Italy has found ways to
keep pumping even as clashes among warring militias and Islamic
State damaged the country's oil infrastructure.
Libyan National Oil Co. Chairman, Mustafa Sanallah, told a
London energy conference Tuesday that he had been waiting for a
"legitimate government with a mandate from the people to come to
power" before allowing foreign investment again. But that hasn't
happened.
"We cannot stand back and do nothing while the state
disintegrates," Mr. Sanallah said in a speech at Chatham House, a
think tank.
Libya's U.N.-backed unity government in Tripoli has struggled to
assert control over the sprawling North African country. Militias
still control Libya's most important infrastructure, and a separate
government claims power in the country's eastern regions.
In an interview, Mr. Sanallah also said his company plans to
bring its crude-oil output to 1 million barrels a day by April and
to 1.25 million barrels a day at year end. If executed, that level
of production would represent a remarkable turnaround in a place
where violence and the lack of a working government resulted in
output falling below 200,000 barrels a day in 2016.
Libya has been on the cusp of an oil-production rebound before,
only to have it fizzle. This time would be different, Mr. Sanallah
said, because Libya's political factions have agreed that oil flows
are necessary.
The most recent ramp up has come after breakthroughs that
included a U.S.-led route of Islamic State from its Libyan
strongholds and the agreements among several militias to allow oil
ports and fields to reopen.
While new foreign investment likely won't come fast enough to
help with the production ramp up this year, Mr. Sanallah said it
would help revive the long-term future of the country's oil
industry.
Mr. Sanallah said he was in talks to rehabilitate a field partly
owned by Total and a terminal where ConocoPhillips is a
partner.
He said U.S., Chinese and South Korean companies have also
approached Libya to invest billions of dollars in new oil and gas
fields, refineries and petrochemical plants. He said he would meet
some of the companies, which he didn't name, on Thursday during a
London summit to promote investment in Libya.
Mr. Sanallah said studies before the civil war had estimated
Libya's oil industry needed investment of $100 billion to $120
billion. He said he wants to return Libya to its prewar production
level of 1.6 million barrels a day by 2022.
Write to Benoit Faucon at benoit.faucon@wsj.com
(END) Dow Jones Newswires
January 24, 2017 09:54 ET (14:54 GMT)
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