Libya’s crude oil production topped 1 million bpd, the National Oil Corporation said this weekend, although it added this level of production may not be sustainable.
“It is worth mentioning that the National Oil Corporation faces very big financial difficulties and a huge shortage of its budgets which led to accumulating of debts on the sector’s companies and significant delay for the salaries of its service companies,” the NOC said.
“The National Oil Corporation asserts that it may not be able to sustain the current production levels and these levels may be reduced or totally ceased under the reluctance of some entities and their hindering of NOC’s efforts to increase production and restore the prosperity of the national economy,” the company added.
Libya has been ramping up its crude oil production since late September when the LNA blockade on oil ports began to be lifted. In less than six weeks, then, NOC managed to bring average daily production from less than 100,000 bpd to 1.03 million bpd.
The state oil company has already called on the Government of National Accord to release the budget funds that it needs to pay off the debts it accumulated during the nine months of the blockade. It also incurred losses of some $10 billion for the duration of the blockade, the NOC said in October.
At the moment, the GNA is negotiating a ceasefire with the Libyan National Army, and the latest reports point to progress being made. The question remains, however, whether there is enough money in Tripoli’s coffers to keep the oil pumps going.
Libya’s returning production has added considerable pressure on oil prices as it comes at a time when demand growth is once again in jeopardy because of the resurgence in Covid-19 cases and when OPEC+ is discussing deepening its production cuts to stabilize prices
