Libya warns damage from oil blockade could last for years
The OPEC member is “on track for a precipitous decline over the next year and a half as a result of the illegal blockades,” the state oil firm said Tuesday in a statement. “Continuing the blockade only makes our long-term problems worse. It is vital that we resume oil production as soon as possible.”
Without rapid maintenance and repairs, the North African country may only be able to produce 650,000 barrels a day by 2022, the company said. That’s barely half what Libya was pumping in January before supporters of Khalifa Haftar, who is battling the United Nations-recognized government based in Tripoli in the west, halted oil operations in the east, home to many of the largest fields and ports.
The NOC has previously said talks involving the U.S. and regional powers are underway to allow output to resume.
Nine years of civil war have caused repeated closures of oil facilities in Libya, which has Africa’s largest crude reserves.
“Some of the damage we have suffered is permanent and can never be repaired,” NOC Chairman Mustafa Sanalla said in the statement.
Closing fields suddenly means they suffer “mechanical, structural, chemical and even microbiological changes,” the NOC said. Bacterial growth can increase the levels of sulfur in the crude, “making it less valuable,” it said.
The central bank has said lost oil revenue this year amounts to $7 billion.
Between 160 and 260 wells will have to undergo repairs at a cost of between $50 million and $100 million, according to the NOC. Fixing its pipeline network, which covers more than 6,760 kilometers (4,200 miles), will require additional funds.