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Libya's Oil Industry Faces Crisis Following The Ouster Of NOC Chairman

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

Libyan oil minister Mohamed Oun cannot suspend the chairman of Libya’s National Oil Corporation, the head of NOC, Mustafa Sanalla, told Bloomberg after Oun said this weekend he had suspended Sanalla and referred him for investigation.

“The minister of oil cannot legally suspend me from work or refer me to investigation,” Sanalla told Bloomberg in an interview on Monday. “The cabinet is the decision-maker and has the final word on the NOC,” the state oil firm’s long-standing chairman said.

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

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 tensions 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.

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

Insisting that only the cabinet has the authority to suspend a chairman at NOC, Sanalla also said that an oil ministry is a burden on the national oil corporation.

“The NOC would be much better off without the presence of the Ministry of Oil,” Sanalla told Bloomberg in the interview. “The ministry is a heavy burden on the NOC,” he added.

Still, the dispute between the ministry and NOC will not affect Libya’s oil production, Sanalla noted.

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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.

By Charles Kennedy for Oilprice.com

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