Libya’s National Oil Corporation has declared force majeure on the port of Hariga due to lack of funds for infrastructure repairs, pushing the country’s crude oil production below 1 million bpd for the first time in months as NOC was forced to suspend production at several fields.
The company blamed the shortage of funds on Libya’s central bank.
“While the National Oil Corporation understands the motives of the suspension which is outside the control of the company and seeks an excuse for the government of National Unity due to the delay in approving the budget for the year 2021, it places full legal responsibility on the Central Bank of Libya, which refused to liquidate the financial arrangements approved in accordance with the decision of the former Government of National Accord,” NOC said in a statement.
NOC went on to blame the central bank for acting as the indirect cause of problems including reservoir and transmission line collapse, reservoir pollution, and well suspension, all because it had not provided the necessary funds for maintenance to the state oil company.
Libya began ramping up its crude oil production last September after the lifting of an eight-month blockade of the oil ports. Since then, it has managed to bring it from below 100,000 bpd to over 1.2 million bpd to the surprise and probably chagrin of its fellow OPEC members.
However, the stability of this production rate has always been doubtful due to the many financial and political problems plaguing the home of Africa’s largest oil reserves. NOC has been vocal in its criticism of the former government in its attitude to financing the oil industry, and while it may be more understanding to the new government, the fact remains that it needs money to continue producing oil.
By Irina Slav for Oilprice.com
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