Libya’s oil production and exports, suspended in January this year by the Petroleum Facilities Guard (PFG) in central and eastern region, is on track for a precipitous decline over the next year and a half as a result of the illegal blockades, the National Oil Corporation announced on Tuesday.
The NOC Chairman Mustafa Sanallah said they now estimate oil production will decline to 650,000 bpd in 2022, in the absence of an immediate restart of oil production and because of the state’s failure to provide the requested budgets to address the many challenges resulting from the blockade.
“This blockade is a historic crime against the people of Libya. Some of the damage we have suffered is permanent and can never be repaired. Producing oil reservoirs that are shut down suddenly undergo mechanical, structural, chemical and even microbiological changes. These changes can result in early water production and death of oil wells." Sanallah explained.
He added that in some fields, there are concerns about bacterial growth which will change the characteristics of the oil. Libyan oil is valued for being low in sulphur, adding that the bacteria will raise the sulphur content, making it less valuable.
“At the same time, and on top of the $6.5 billion in lost production we as a nation have suffered, NOC faces huge extra costs as a result of the illegal blockade,” said Sanallah.
He added that NOC will have to work over between 160 and 260 wells, at a cost of between $50 million and $100 million, saying that the major pipeline network, covering more than 6,760 kms, as well as surface equipment, will require a huge budget for maintenance and repairs, with the total cost running to billions of dinars.
“Continuing the blockade only makes our long-term problems worse. It is vital that we resume oil production as soon as possible. It is shameful that some Libyans are cooperating in this act of sabotage, which only serves the interests of external states. It is very clear that the interests of Libyans are only served by restarting production immediately.” Sanallah explained.