The Libyan energy industry has seen no end to political upheaval, with the abrupt resignation of Deputy Petroleum Minister Refaat al-Abbar on September 28 being the latest turmoil.
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Abbar cited “special circumstances” in his resignation letter to Prime Minister Abdul Hamid Dbeibah and appears to be a victim of the protracted struggle between the Benghazi-based Libyan national army and the Tripoli-based government of national unity to control the situation. country.
Abbar, who hails from eastern Libya and maintained close ties with the ANL, said internal feuds within the ministry and with the state-owned National Oil Corporation were untenable. said sources working in the country.
“He was the glue that held the cohesion and managed the interests of LNA and GNU,” one said on condition of anonymity.
Right before his resignation, Abbar agreed to answer written questions from S&P Global Platts about the ministry’s work to rebuild its besieged industry.
He said Libya, which has Africa’s largest oil reserves, would redouble efforts to attract international finance to boost crude and gas production which has suffered in recent years from war, sabotage. and underinvestment.
Libya is currently pumping around 1.2 million barrels per day of crude, Abbar said, and the ministry aims to reach 1.4 million barrels per day by December and 1.6 million barrels per day by 2022, based on government funding the NOC receives from the still. national budget not adopted.
Even if that target is met, it would still be well below Libya’s peak crude production of around 1.75 million barrels per day in 2008.
“Despite the lack of budgets for years and the resulting shortage of spare parts and supplies to ensure stable production rates, the Oil Ministry and NOC are making serious efforts,” said Abbar, who had been appointed to his post in May.
Crude exports from three main Libyan oil terminals – Es Sider, Ras Lanuf and Marsa el-Hariga – resumed earlier in September after short-lived protests that have become a regular feature that undermine the country’s reliability to supply key markets in Europe.
But as Abbar’s resignation points out, stability is elusive in Libyan politics, and elections slated for December 24 could be another flashpoint.
Meanwhile, tensions still simmer between Oil Minister Mohamed Oun and NOC Chairman Mustafa Sanalla, in a power struggle over Libya’s energy policy, leaving Libya’s oil flows vulnerable to disruption.
Abbar, who previously held senior positions at NOC’s Benghazi-based Arabian Gulf Oil Co., said the Oun and Sanalla camps must put aside their rivalry to improve the environment. investment in Libya.
Below is a transcript of Abbar’s answers to Platts’ questions, slightly edited for clarity.
PLATTS: How does Libya plan to increase its production capacity in the years to come?
ABBAR: Despite the lack of budgets for years and the consequent shortage of spare parts and supplies to ensure stable production rates, the Ministry of Petroleum and NOC are making serious efforts.
The projects to increase storage and modernize ports are strategic projects that support our call to increase exports to 2.2 million bpd, but this is currently difficult due to the lack of adoption of the budget allocated to the oil and gas sector.
NOC and its companies are continuing their efforts to rehabilitate some of the storage facilities in the fields and port of Sidra, Sirte basin and Ghadames basin, which were destroyed in previous years.
PLATTS: What measures is the ministry taking to rehabilitate the country’s oil and gas infrastructure?
ABBAR: We are working towards the realization of the plans of the government of national unity to support the only source of income in Libya, the oil and gas sector, by bringing investments and by implementing strategic projects which are at a standstill in due to lack of financing and low investment, which will have a positive impact on the development of surface equipment, construction works and the development of crude oil.
PLATTS: How are relations between the ministry and the NOC evolving, and what has been your role as deputy minister of petroleum during this difficult period?
ABBAR: We are working hard to raise the level of coordination between higher authorities and between the NOC and the ministry in order to create harmony, … implement strategic projects, and provide the necessary conditions to maintain the flow of production of oil and gas. We are working impartially to reconcile all the Libyan people without any political orientation, in order to serve the success of the NOC and the revival of the national economy.
PLATTS: What’s the latest on the frozen budget and fund allocation for Libya’s oil and gas sector?
ABBAR: The production continues at present thanks to the efforts of the workers in the oil sector despite the technical difficulties. To meet our goals of increasing oil and gas production, we need approximately $ 12 billion to conduct full remediation operations. Efforts and cooperation continue with the government of national unity to find urgent solutions to the funding problems.
PLATTS: Does the ministry have plans to reform the downstream sector of the country?
ABBAR: Regarding refining, the Ministry of Oil and Gas is considering a number of investment offers from foreign partners, and is working to bring investors in coordination with the government and the NOC … to promote the abundance of fuel and support development.
We are also concerned about clean and renewable energy programs that support our environmental conservation priorities.
PLATTS: What measures is the ministry taking to attract foreign investment?
ABBAR: During the month of October, we aspire to visit Germany, France, UK and Russia to assess investment opportunities in the oil and gas and petrochemical industry, as well than to open up cooperation prospects which contribute to the development of reserves and allow further exploration in promising oil zones.
PLATTS: The United States has been very involved in the dialogue with Libya to rebuild the country. What role is the United States playing in the rehabilitation of Libyan infrastructure?
ABBAR: The United States has been a long-time partner of Libya and we are working through oil conferences in Tripoli and Houston to encourage investment from large American companies that have modern technology, so that we can keep up with developments in this industry. These will be an opportunity to share knowledge and strengthen economic relations between the two countries.
PLATTS: Has the ministry spoken to OPEC about a potential production quota for Libya in 2022?
ABBAR: Libya is part of OPEC and has always strived to cooperate with member states to ensure the stability of the oil and gas markets. Libya is exempt from the production reduction policy adopted by OPEC + due to its production interruptions and frequent shutdowns. Maintaining Libya’s exempt status depends on what happens to the oil market in the future, and today we need to make up for lost market share and take advantage of the price recovery.