Libya oil ministry proposes shake-up of key industry

Tue Nov 27, 2012 1:29pm EST

* Ministry proposes creation of two separate bodies in Tripoli and Benghazi

* Exploration and production would be separated from refining

By Marie-Louise Gumuchian

TRIPOLI, Nov 27 (Reuters) - Libya's oil ministry is proposing to separate the OPEC member's exploration and production activities from refining, shaking up the running of its key industry by creating two separate bodies that would be headquartered in Tripoli and Benghazi.

In a move that could be seen as appeasing calls for more authority in the oil-rich east, new Oil Minister Abdelbari al-Arusi said the ministry was proposing to set up a body dealing with Libya's oil refining and petrochemicals in Benghazi.

Carving up the responsibilities of the Tripoli-based National Oil Corporation (NOC), the capital would be the headquarters for a separate exploration and production body.

"In the oil and gas ministry, we have a near-term plan with respect to the (eastern) region," Arusi said in comments posted on the NOC's website after a recent visit to oilfields in the east and a meeting with Benghazi's local council.

"(The body) will be called 'The National Corporation for Oil Refining and Petrochemicals Industry' and will oversee all companies operating in this area. It will launch projects and secure funding for them."

The NOC website quoted him as saying it would have a branch in western Libya. The Tripoli-based 'National Corporation for the Exploration and Production of Oil and Gas' would have a branch in Benghazi, he said.

"These two bodies will be under the ministry," he said.

The proposal comes after the NOC reviewed a plan for a Benghazi branch as officials contended with opposition by NOC staff in Tripoli versus protests and threats of output cuts by workers in the east who want more control there.

The NOC is headquartered in Tripoli and since the end of last year's war that ousted dictator Muammar Gaddafi, workers in the east have called for more powers in a region accounting for around 80 percent of Libya's oil wealth.

The proposal for the two organisations will be submitted to the government for approval before being passed on to the ruling national congress.

"It is a matter of reorganisation," Deputy Oil Minister Omar Shakmak told Reuters. "We will receive feedback from experts within the oil sector and civil organisations ... and upon that, a proposal will be submitted to the government."

Libya's new rulers have spoken of plans to change the running of its oil sector. Arusi was sworn in as oil minister this month, taking charge of Libya's economic lifeline after it was restored to around pre-war output levels of 1.6 million barrels per day. (Additional reporting by Ali Shuaib in Tripoli and Hamid Ould Ahmed in Algiers; editing by James Jukwey)

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