Libya’s Cash To Run Out By 2017 Without Jump In Oil Exports

Libya could run out of funds in 2017 to keep the government operational if oil exports do not return to pre-civil war levels, according to the country’s National Oil Corporation.

“It is no secret we are on the road to financial collapse," NOC chairman, Mustafa Sanalla, said a week before the upcoming meeting of the Organization of Petroleum Exporting Countries in Algiers. "We are running a budget with a huge deficit and we have spent half our reserves in the last few years," he said. "Without a resumption of exports we could run out of money next year."

Sanalla made the statement after the Ras Lanuf port sent off its first shipment in two years. The 776,000-barrel cargo left the terminal just one week after military strongmen loyal to Khalifa Hafter seized the port and handed the NOC control.

Libya holds Africa’s largest oil reserves at 48 billion barrels. Years of crisis since the overthrow of Muanmar Ghaddafi have caused production rates to fall from 1.6 million barrels per day under the dictator to 285,000 bpd this last May, and 260,000 in August.

This output rate has recovered to 450,000 bpd, according to Ibrahim Al-Awami, head of oil measurement department at state-run National Oil Corp in a phone interview with Bloomberg last Tuesday.

Sanalla measured the costs of losses in oil production since 2013 as equal to $100 billion.

Related: Did The World’s Biggest Oil Company Boost Its Reserves Artificially?

"Oil can and should be a driver for unity," he said. "We should all work to raise production, exports and revenues because we will all benefit from a healthy economy. Overcoming our political divisions has taken time and may take more time. Meanwhile we should not neglect the fundamental necessities of our people: food, medicine, fuel, electricity, education, salaries and so on."

A joint resolution from the European Union, the United Nations, the Arab League and the African Union on Friday called for the end of violence in Libya and encouraged recent developments in the oil industry.

"We welcome the recent transfer of the oil facilities in the oil crescent to the NOC as well as the plans to increase oil production and exports," it reads.

By Zainab Calcuttawala for Oilprice.com

More Top Reads From Oilprice.com:

• Nigeria Sues Oil Majors Over $12.7 Billion In ‘Stolen Oil’
• Russia And Saudi Arabia Playing A Risky Game Ahead Of OPEC’s Meeting
• Why Oil Prices Can’t Stay Low For Much Longer