Algeria News

Libya's NOC warns budget delays causing oil output losses

TRIPOLI, Aug 29 (Reuters) - Delays in the budget from Libya’s new government for the state energy company are undermining oil production, losing around 200,000 barrels per day at the cost of millions of dollars, the company chief said on Monday.

The statement from National Oil Corporation Chairman Mustafa Sanalla reflected general frustration among Libyans with the slow pace of the Tripoli government in tackling economic problems.

Libya, which holds Africa’s largest oil reserves, has seen it production dip below 300,000 barrels per day (bpd) because of fighting, strikes and attacks. Its peak was 1.6 million bpd before the 2011 uprising against Muammar Gaddafi.

Sanalla said NOC calculations showed budget shortfalls caused production losses at its AGOCO and Sirte Oil fields of around 35 million barrels or 229,000 barrels per day since the government’s presidential council took office in March.

He called on the government’s financial arrangements committee to explain the delays in the budget that had cost an estimated $1.56 billion in losses so far.

“Let me make one thing very clear: blocking payments to NOC is harming the Libyan people,” he said in the NOC statement. “The money is there. The treasury would recover its investment in two to three months, as well as almost double its income.”

Libya’s oil output has been disrupted by a conflict between two rival governments since 2014, with ports and oilfields often in areas controlled by rival armed factions. Islamic State militants have also attacked fields and oil terminals.

A U.N.-backed national unity government has been in place since March in an attempt to overcome those divisions. But it has been hobbled by political infighting and resistance from hardliners who reject its authority.

The NOC said last month it aimed to increase production by 150,000 barrels per day (bpd) within two weeks after a deal to reopen two major oil terminals. It had said it aimed to gradually increase output to 900,000 bpd by the end of the year. (Reporting by Ahmed Elumami and Libby George in London; writing by Patrick Markey; editing by Susan Thomas)