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AfrOil COMMENTARY AfrOil

Customers queue up for fuel in Botswana (Photo: BlackVoiceNews)

Libya heading for more trouble

The North African state could see oil production levels fall even further in the near future

LIBYA’S oil sector has already suffered greatly grievous harm to the Libyan economy, which is
this year as a result of ongoing civil conflict. heavily dependent on revenues from oil sales.
WHAT: The country has seen crude production lev- NOC recently estimated that it had lost $6.5bn
NOC’s latest attempt to els drop precipitously, sinking from more than as a result of the clashes between the LNA and
restart oil exports has 900,000 barrels per day to less than 100,000 bpd its rival, the Government of National Accord
ground to a halt. within just a few months. And there may be (GNA), which is based in Tripoli.
worse to come, as efforts to hammer out a peace Making up these losses will be difficult, espe-
WHY: deal falter. cially since global crude prices have retreated
LNA-allied troops have significantly since January. But market dynam-
renewed their blockade Background ics are not the only problem. The North African
of oilfields and terminals, The trouble began in late January, when sep- state has also sustained damage to vital infra-
allegedly with the help of aratist forces loyal to Khalifa Haftar’s Libyan structure – to the very facilities that allow the oil
foreign mercenaries. National Army (LNA) began blocking ship- industry to operate effectively – and it is likely to
ments from oilfields in the interior to processing have difficulty with the repairs.
WHAT NEXT: facilities and export terminals on the coast. “On the top of the $6.5bn in lost production
Third-party involvement These moves prevented National Oil Corp. we as a nation have suffered, NOC faces huge
in the conflict could bring (NOC) from exporting its production and extra costs to repair infrastructure damage,”
oil output down to an impaired its ability to refine crude oil into usa- Mustafa Sanalla, the company’s chairman,
even lower level. ble petroleum products. As a result, they caused explained earlier this month.

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