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The year is not yet over, but Libya’s crude oil exports to China in value terms are already worth twice as much as what the North African country exported to China last year, the head of the National Oil Corporation said, as quoted by Reuters.
Since January, Libyan oil exports to China have hit a value of US$3.5 billion. This compares with US$1.7 billion for the whole of 2017 when Libyan fields suffered pretty much regular outages. This year has not been without outages and pipeline blockades either. Still, NOC and its partners have managed to weather the effects of these interruptions—in one case involving as much as 850,000 bpd in production—and expand Libya’s production rate to 1.3 million bpd. Pans are to raise this further to 1.6 million bpd by the end of next year.
China will naturally be a top destination for this higher crude production, and NOC’s Sanalla emphasized this during his recent meeting with the Chinese Chargé d’Affaires in Tripoli, saying he was “rightly proud of our growing relations with China, and look forward to enhancing and broadening them further to serve the common interests of both the Libyan and Chinese oil sectors.”
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China will definitely be interested in that cooperation: its domestic oil production is falling and state oil companies are increasingly looking abroad for more own production. Libya is one of the countries that certainly makes sense as an investment destination with its huge oil reserves—estimated to be the largest in Africa—and eagerness to make the best of them as it has virtually no other major export commodity or product.
The situation in the country seems to be improving, too. The latest sign yet that things in Libya may be on the mend was the October announcement by BP and Eni that they will start drilling at a field they share in early 2019. BP won two exploration licenses in Libya back in 2007, but the 2011 civil war interrupted its plans for the country. Eni agreed to buy a 42.5-percent interest in BP’s exploration and production sharing agreement with NOC earlier this month, and they are now ready to start drilling in the offshore block.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.