Libya's National Oil Corporation needs US$2.5 billion to invest in raising its crude oil production to 800,000 barrels per day next year from around 590,000 bpd currently, its chairman Mustafa Sanalla said on Tuesday, calling for access to funds.
Under the current system of managing oil revenues, NOC is not directly paid; rather, the proceeds go to the Central Bank of Libya (CBL), which then pays the NOC as per the budget approved by the government.
Speaking at a conference in London, NOC's Sanalla said that Libya's crude oil output had increased from around 290,000 bpd in mid-September to around 590,000 bpd now, following the reopening of ports.
As good as this is for Libya, it's bad news for the exacerbating oil glut, and adds another headache to what seems an almost impossible OPEC production cut deal.
Although never officially communicated, there is a general understanding that Libya, alongside Nigeria, and possibly Iran, would be exempt from OPEC production cuts, with violence and sanctions having taken their toll on those three countries' oil production in recent months and years.
At the London event earlier this week, Sanalla enlisted three major factors on which Libya's output growth hinges: the ports and pipelines ability to remain open; the lifting of the Riyayna pipeline blockade; and meeting NOC's budget demands.
Should these three conditions be met, Libya will earn oil, petrochemicals and oil products revenue of US$15.847 billion next year, assuming an oil price of US$45 for most of 2017, Sanalla noted.
In case NOC's demand for funds is not met, the corporation's production would be 520,000 bpd next year, with revenues at US$11.72 billion, the manager added.
The Riyayna pipeline alone is expected to add 265,000 bpd to NOC's production and US$4.5 billion to 2017 oil revenues.
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