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Egyptian oil companies that had operations in Libya but pulled out during the civil war will return to the country, the National Oil Corporation said.
NOC’s chairman Mustafa Sanalla said the Egyptian companies will help Libya’s NOC to boost oil production by resuming previously suspended projects and will also take part in expanding the country’s pipeline network, both for oil and gas.
Earlier this month, Sanalla warned that Libya’s oil production could drop steeply soon unless the Government of National Accord - the UN-recognized Libyan government - released funds meant for the National Oil Corporation.
"If the corporation's allocations are not released without delay, Libyan oil production will be hundreds of thousands of barrels per day lower than it should be. That will have an extremely negative effect on national income," Sanalla said at the time.
A few days later, however, the GNA released the funds due NOC in yet another demonstration of the vital importance of the country’s oil industry for most of its revenues.
To date, NOC produces some 1.3 million barrels of oil daily, but last year Sanalla said that the company was eyeing a return to pre-war levels of 1.6 million bpd by the end of 2019. This may not happen by the end of the year, but if more foreign companies return to the North African country, production may continue to grow.
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Of course, the danger of outages remains as the political situation remains unstable. Over the last few years as various groups fought for control of Libya’s oil wealth, outages became more or less a regularity, especially at the largest field, El Sharara, which produces about 300,000 bpd of crude.
This instability was the reason for BP AND Eni, which had last year announced plans to return to Libya, to postpone this return as the offensive of east Libya-affiliated LNA on Tripoli continues.
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.