Libya's oil production could reach one million barrels per day soon

Speaking to U.K. ambassador, Peter Millett, Libyan National Oil Corporation (NOC) chair Mustafa Sanalla claimed that Libya was on course to produce one million barrels per day by the end of July.

This production level has not been reached since back in 2013. Sanalla noted though that there were repeated attempts to disrupt production. Smuggling of oil and fuel and fallout from the Qatar crisis were also problems. The death of a worker in Libya's largest oil field recently caused a brief closing down of production as workers protested. Sanalla mentioned the need to improve safety for oil workers, the protection of the environment, and providing aid for local communities dependent on oil jobs.

Sanallah hosted the Turkish ambassador to Libya, Ahme Dogan. Dogan invited Sanallah to the upcoming World Petroleum Congress meeting to be held in Turkey next month. Even though the Turkish embassy has reopened in Tripoli, Turkish oil companies have yet to resume operations but Dogan hoped that Libya would soon be stable enough for the companies to return.

The NOC, back in February, was able to strike a deal with the huge Russian firm Rosneft for cooperation on oil. The NOC has also recently settled a dispute with the German oil company Wintershall at least on a interim basis. According to an NOC statement: "The agreement with Wintershall would allow an immediate resumption of production at Wintershall's concession areas in eastern Libya, where work was suspended due to an administrative dispute after the Presidential Council had decided to split the authorities of the NOC and the oil ministry with the NOC, keeping for itself the administration of oil investments."

The dispute between Saudi Arabia and other Gulf States and Qatar may have repercussions that could cause difficulty for the NOC. The HoR government of Abdullah al-Thinni has instructed the eastern-based parallel National Oil Corporation to shut down the Tobruk Hariga oil export terminal as crude from the port is exported by the international oil trader Glencoe. The Qatari Investment Company of Qatar has a nine percent stake in the company. Qatar has been accused by Saudi Arabia, the UAE, and Egypt of supporting Islamic militants in Libya and the Muslim Brotherhood. Glencoe signed a long-term deal with the Tripoli-based NOC back in 2015 to export 160,000 barrels per day from the NOC subsidiary AGOCO. Back in July last year the two rival oil companies, one in Beida and the other in Tripoli agreed to merge but the deal appears never to have been completed, leading to a situation where the eastern company can threaten the Tripoli-based NOC's monopoly in areas where the HoR may have control.

Sanallah has warned against any interruption of existing contracts such as that with Glencoe or attempts to block exports from eastern terminals such as Harriga. He also warned the eastern company headed by Naji Maghrabi of selling any oil independently of the Tripoli-based NOC which is recognized internationally as the sole supplier of Libyan oil. There are unverified reports that the Beida-based NOC is in the process of selling a crude cargo to a Saudi trading company. Sanalla praised Haftar's LNA for handing back to the Tripoli NOC control of the four main Oil Crescent ports. We will soon see what Haftar's position is on these new developments.