Oil report

UPDATE 3-Libya's NOC moves to shield oil output from budget, security risks

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LONDON, Oct 11 (Reuters) - Libya’s National Oil Corporation (NOC) is mobilising key stakeholders to protect its output, which it said has been curtailed by it only receiving 25 percent of its 2017 budget.

The North African country’s output is around 1 million barrels per day (bpd), NOC Chairman Mustafa Sanalla told reporters on Wednesday, adding that a goal of 1.25 million bpd by the end of the year was “very difficult” to achieve.

The recent rise in Libyan production has complicated an OPEC-led push to cut global production and bolster oil prices, from which Libya is exempt.

Sanalla said Libya had explained its production challenges to OPEC and non-OPEC producers in the past few months.

“Our colleagues in OPEC and non-OPEC understand the situation, there’s uncertainty in Libya ... We were very frank and we gave reports.”

Production is about four times higher than in mid-2016, but it is still held back by shutdowns, lack of maintenance and damage from past fighting.

“We lost in one day 90,000 bpd because of lack of money,” Sanalla said, without specifying from which oil fields.

Sanalla said 12 out of 19 storage tanks at the Es Sider oil port and half of 13 tanks at the Ras Lanuf terminal were still out of action following attacks there last year.

Last week, production at the key Sharara oilfield resumed after an armed faction forced a shutdown in a salary dispute - the latest in a series of closures at Sharara, which produces up to 280,000 bpd.

Libya has lost some $126 billion in revenue due to blockades over the past five years, Sanalla said.

Sanalla was speaking in London after attending a two-day gathering of more than 40 Libyan and international representatives which issued a draft statement of principles on ways to safeguard Libya’s oil sector from security problems and political turmoil.

The draft principles say the NOC should receive timely funding from the government, that attempts to blockade or disrupt production will be prosecuted, and that no payments should be made to blockaders.

Participants included the governor of the central bank in Tripoli, tribal and municipal representatives, international oil companies and diplomats.

“The purpose is to protect Libya’s oil,” Sanalla said. “Libya without oil cannot be stabilised. Libya without oil cannot prosper.” (Editing by Alexander Smith, Greg Mahlich)