Libya's crude oil production, which has stabilized in recent months at just over 1.2 million barrels per day (bpd), could drop in the coming days and possibly weeks after a field operator stopped pumping crude because of delays of budget allocations.
The Arabian Gulf Oil Company, a subsidiary of the National Oil Corporation (NOC), has decided to halt production because of the delays in the budget that is planned to allocate money to the oil firm to repair and maintain infrastructure and keep oil production online, Ahmed Al-Oraibi, head of the media department at the Arabian Gulf Oil Company, told Libyan privately-owned channel 218TV on Sunday.
NOC did not comment on the decline in production, the channel added.
Arabian Gulf Oil Company is the operator of the oilfields Sarir, Mesla, al-Bayda, Nafoora, and Hamada, which, combined, can pump 300,000 bpd. Related: Oil Demand Could Peak By 2026: Goldman Sachs
News of renewed problems with budget allocations comes a month after a new cabinet was sworn in, the first unity government of the war-torn country since 2014, reviving hopes that Libya could see more stability in oil production going forward.
Libya-exempted from the OPEC+ cuts-surprised many oil market observers, and probably the OPEC+ group itself, after managing in just a few months to restore its oil production back to 1.25 million bpd from less than 100,000 in September 2020, when an eight-month-long blockade on its oil ports ended.
Libya may be able to maintain its current level of oil production of around 1.2 million bpd until the end of this year as the oil sector is finally receiving enough funding for field maintenance and development, Libya's Oil Minister Mohamed Oun told Bloomberg in an interview last month. In March, Oun was sworn in as the first oil minister of the country since 2014.
Days before Libya's unity government was sworn in, NOC's chairman Mustafa Sanalla told Bloomberg Television that the country planned to raise its oil production to 1.45 million bpd by the end of this year.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More