Page 12 - DMEA Week 39 2021

DMEA REFINING DMEA

Libya approves establishment

of refinery near El Sharara

AFRICA THE Libyan government this week announced country’s oilfields and terminals, have been dis-
that it had approved plans for the establishment rupted at various points over the past decade.
of an oil refinery in the area surrounding the In March, a Paris court of appeal had upheld
country’s largest oilfield – El Sharara – in the an arbitration ruling against Libyan Emirates Oil
south-west. Refining Co. (LERCO) pertaining to the closure
Announcement of the approval was given of Ras Lanuf refinery in 2013.
by government spokesman Mohamed Hamuda LERCO, which is a joint venture between
following the seventh regular cabinet meeting NOC and a subsidiary of the UAE’s Al Ghurair
on September 27. He said that the facility would Group, operates the 200,000 bpd facility. The
produce LPG while noting that the approval appeal relates to an arbitration ruling in 2018
mandates that the government’s royalties and relating to a complex dispute between the parties
taxes paid by foreign companies as well as rev- that led to the refinery being closed.
enues from concessions will be reinvested in Attempts to restart the plant faltered and
maintenance work. plans to invest $2bn in the refinery had to be
He did not provide any further detail about shelved, leading to disagreements over the finan-
the planned refinery, but plans have previously cial management of the plant.
been announced for the construction of a 50,000 Via social media, NOC said that the Paris
barrel per day (bpd) near El Sharara. court had upheld the ruling that instructed
In 2013, then Prime Minister Ali Zeidan said LERCO to pay NOC more than $115mn plus
that the plant would be built in Awbari, around interest, which amounted to $132mn as of Feb-
55 km to the east of the oilfield, with a larger, ruary 28. The court also confirmed LERCO’s
300,000 bpd unit to be built in the northern obligations under a take-or-pay contract and
coastal city of Tobruk. The units were intended ordered the company to pay $120,000 in costs.
to cater to local fuel demand. Sanalla said: “NOC is the trusted guardian of
Libya’s current refining slate comprises facili- the Libyan oil wealth. It has not and will never
ties at Ras Lanuf (220,000 bpd), Zawiya (120,000 hesitate to take the steps necessary to protect and
bpd), Tobruk (20,000 bpd) and Sarir (10,000 preserve that wealth.”
bpd), all of which are operated by the National The company added it would “take all neces-
Oil Corp. (NOC). sary steps to enforce its rights under the award
Operations at each of these, like those at the and the court’s decision”.™

P12 www. NEWSBASE .com Week 39 30•September•2021