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Libyan Minister Accuses Oil Majors of Exploiting Political Instability

Libya’s oil minister has accused international oil companies operating in the country of taking advantage of the political instability in the country to delay their development plans.

"Most of the IOCs have committed to specific projects and up till now they have unfortunately not acted as they should act," Mohamed Oun told S&P Platts in an interview.

Earlier this year, Libya’s National Oil Corporation issued a statement saying that oil majors including BP and Italy’s Eni had lifted the force majeure declared on their Libyan operations, effectively returning to the country.

At the time, the National Oil Corporation said the international companies had notified it of their intentions to resume their contractual obligations with the Libyan state oil company. Now, however, the oil minister is accusing the same companies of trying to exploit the security problems of Libya to negotiate better contractual terms and are in no hurry to resume oil and gas production.

Late last year Libya called on the supermajors to return to its oil and gas field. Then, earlier this year, Libya prepared to launch its first oil and gas tender in 17 years as the situation improved enough to allow it to boost oil production to some 1.2 million bpd and keep it there for much of the year.

The tender will be held in 2024 and should help Libya move closer to its target of 2 million bpd in daily oil output by 2026. According to the African Energy Chamber, Libya’s maximum production capacity is 1.8 million bpd by 2024 but Tripoli insists it can boost this to 3 million bpd in two to three years.

Libya is currently producing some 1.24 million bpd, according to the National Oil Corporation. So far this year, production has hovered around 1.2 million barrels daily with interruptions due to protests and field blockades rarer than in previous years.

By Charles Kennedy for Oilprice.com

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