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Libya’s No.1 Oil Man Sanalla Returns To Post After Suspension

Libya’s Prime Minister has revoked a decision by the oil ministry to remove the chairman of the National Oil Corporation, Mustafa Sanalla, from his post.

The Libyan oil ministry suspended Sanalla in August, saying he traveled abroad without first obtaining the relevant approval, Bloomberg reported at the time. This, according to the country’s oil minister, constituted a violation of policy.

The move followed a request by oil minister Mohamed Oun to the Libyan government to oust Sanalla and the entire NOC board because, according to him, it was formed in violation of Libyan law.

The tension between Oun and Sanalla has been growing since Oun was appointed oil minister in March in the government of national unity, which includes a post for an oil minister for the first time in five years.

The attempts by the head of Libya’s oil ministry to remove Sanalla from the post he has occupied for seven years led to higher tension between the two institutions, threatening Libya’s oil production, always highly vulnerable to conflicts of any nature.

The conflict between the officials escalated with protests against the head of the National Oil Corporation, which added to upward pressure on oil prices.

Oil is Libya’s biggest export commodity, responsible for most of its budget revenues. Last month, central bank governor Sadiq Al-Kabir told Bloomberg that the country needed to boost its oil output by 40 percent in 2022 in order to be able to pay its bills and begin to recover economically.

Libya is currently producing around 1.4 million bpd but needs to boost this to 1.8 million, Al-Kabir said. This would bring in revenues of $35 billion next year, assuming an average price of $60 per barrel of crude.


This may be challenging as the political situation in Libya remains sensitive, as last evidenced by the abovementioned protests. These involved sit-ins at oil export terminals, which disrupted loadings, and protests at a third terminal also affected Libya’s oil exports.

By Charles Kennedy for Oilprice.com

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