Page 4 - AfrOil Week 32

AfrOil COMMENTARY AfrOil

(Photo: NOC)

Trouble looming in Libya

NOC’s head warns of risks to export terminals’ storage facilities,
as Egyptian-Greek maritime accord steps up territorial disputes

MUSTAFA Sanalla, the head of Libya’s National Under such circumstances, he said, Libya’s
Oil Corp. (NOC), warned last week that his economy would suffer. Without the terminals,
WHAT: country was courting disaster. the country will lose its ability to send its hydro-
NOC chairman says In a recorded statement, Sanalla raised con- carbons to market, and it might not be able to
accidents at Libyan cern about security conditions at the storage repair the damage and construct new export
export terminals might facilities that serve Libya’s export terminals on facilities for years, he explained.
dwarf August 4 explosion the Mediterranean Sea. These depots are facing “This will also result in the loss of sales
in Beirut. heightened risks now that militia groups have opportunities estimated at hundreds of billions
seized control of key oil and gas infrastructure, of dollars that other oil-producing countries will
WHY: he said. benefit from,” he said. “Furthermore, tens of bil-
The country’s storage fa- He also cited “the presence of [foreign] lions will be needed for reconstruction at a time
cilities are already under mercenaries, as well as the military escalation” when [the funds] available are limited.”
some strain because of between the Tripoli-based Government of
production slowdowns.
National Accord (GNA) and forces allied with Limited options
WHAT NEXT: Khalifa Haftar’s Libyan National Army (LNA) The damage would not stop at lost sales oppor-
Diplomatic disputes and as another source of danger. tunities, either.
Egyptian military inter- The problem, he explained, is that coastal Libya’s domestic fuel and energy market is
vention could raise the storage facilities hold large amounts of crude relatively small. That is, the country typically
risks for Libyan ports. oil, gas condensate, natural gas and chemicals. exports more hydrocarbons than it consumes.
If these inventories are not treated appropriately, As a result, if the terminals are not working,
he warned, they have the potential to lead to upstream operators have limited options: They
“massive destruction” – that is, an accident even can curtail production, or they can try to con-
more severe than the explosion that killed 160 tinue producing oil and gas at the same rates and
people and destroyed port facilities in Lebanon’s transfer their excess output to domestic refiner-
capital Beirut on August 4. ies or storage facilities.

P4 www. NEWSBASE .com Week 32 12•August•2020