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Libya’s Oil Industry Dispute Grows As Minister Suspends NOC Head

The tension among Libya’s top oil officials escalated on Sunday when Oil Minister Mohamed Oun said he had suspended the chairman of the National Oil Corporation (NOC), which is the most important revenue asset for OPEC’s African member.

NOC’s chairman Mustafa Sanalla is under investigation and has been suspended, Oun said in a letter confirmed to Reuters by oil ministry sources.

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.

Earlier this month, reports emerged that Oun had recommended to the government of national unity that it replace NOC’s long-serving Sanalla in a board reshuffle.

Since getting a unity government in March and a petroleum minister for the first time in five years, Libya has vowed it would raise its oil production, provided that the NOC receives the necessary funds.

However, the tensions between the oil minister Oun and NOC’s boss Sanalla have reportedly increased, also because of the overlapping of their functions and duties and the jurisdiction of the oil ministry and the national oil corporation.

Last week, Oun said that Sanalla couldn’t act as chairman of NOC while traveling abroad and appointed Jadallah al-Awkali to be the head of the oil corporation while Sanalla was not in Libya. Sanalla, for his part, rejected the decision, saying there is no procedure or process in which the oil minister alone could replace a chairman at NOC, according to Reuters.

At the end of July, Oun said that Libya could boost its oil production to 1.6 million barrels per day (bpd) by the middle of 2022 if the industry has the necessary funding. Currently, the North African producer exempted from the OPEC+ cuts pumps around 1.2 million bpd.

Libya will struggle to keep its oil production at current levels if the country fails to resolve a long-running dispute over its budget, Oun told Bloomberg earlier this month. The success of Libyan plans to boost oil production remains in jeopardy due to disagreements over the nation’s budget—the first national budget in nearly a decade.

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By Charles Kennedy for Oilprice.com

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