Libyan National Oil Co. reaches oil deal with Russia's Rosneft

The Libyan National Oil Corp. (NOC) has signed a deal for cooperation on oil with the Russian oil giant Rosneft. The deal was made on the sidelines of International Petroleum Week held in London UK.

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The gathering included most larger oil firms in Europe and the Middle East. Mustafa Sanallah, chair of the NOC, signed together with his counterpart in Rosneft Ivanovich Sechin. Sanallah said: “We need assistance and the investment of world giant oil companies to achieve the target of Libya’s oil production and stabilize our economy." He said the deal paves the way for the two corporations to further specify their strategies for cooperation.

The NOC websitej said that the agreement will see the formation of a joint committee from the two companies that will explore opportunities available in different sectors including production and exploration. Another deal allows Rosneft to purchase crude oil from the NOC. The NOC said:“The deals with Rosneft are part of the plans of the NOC to encourage investment by the foreign companies so that Libya’s oil production can hit 2.1 million barrels per day by 2022.”

Declining oil prices along with low production has meant that Libya's revenue from oil had been greatly reduced. More ports are now open and production has increased of late but it still is not back to the level it was before Gadaffi was overthrown. Libya depends upon imports for 85 percent of its needs. The Libyan dinar has fallen quite low in terms of the US dollar making imports ever more expensive. In the last two years imports into Libya have declined 45 percent. Last year grain imports were just 2.6 million tons compared with 3 million tons in 2013.

Russia is increasing involvement in Libya. Khalifa Haftar, the commander of the Libyan National Army (LNA) associated with the House of Representatives (HoR) government in Tobruk has been to Moscow several times. Recently he met with Russian officials on the Russian aircraft carrier Kuznetsov off the coast of eastern Libya. Subsequent to a failed attempt by Faiez Serraj to meet with Haftar in Cairo, Serraj is now hoping that Russia can arrange a meeting between the two. Serraj sees Russia as possibly enabling an agreement between the GNA and Haftar.