Libya state oil firm reopens key export terminal after spat with central bank
TRIPOLI - Libya’s state oil firm is reopening a key export terminal, a week after suspending operations over the central bank’s “refusal” to release funds for the vital sector.
The National Oil Corporation (NOC) “announces the immediate lifting of the state of force majeure at the Hariga terminal and will instruct operators to restart production and exports”, it said in a statement on Monday.
A week ago, NOC said it had suspended operations at the Hariga terminal in the east of the country near Tobruk over “the Central Bank of Libya’s refusal to liquidate the oil sector budget” for several months. Oil production fell by 300,000 barrels per day.
Throughout Libya’s decade of conflict, NOC has repeatedly declared force majeure at its export terminals, absolving itself from responsibility for any failure to comply with delivery commitments.
Usually these declarations have been linked to attacks by armed groups vying for control of Africa’s largest proven crude reserves, which form the backbone of Libya’s economy.
But NOC said last week that the lack of state financing had driven companies in the sector further into debt, leaving them unable to meet financial and technical commitments.
Libya’s oil sector and revenues from exports have been a key focus of conflict since the country slid into chaos following the 2011 toppling and killing of longtime ruler Muammar Gadhafi.
NOC chief Mustafa Sanalla has frequently clashed with central bank governor Saddek Elkaber, accusing him of playing politics with the oil sector and of “illegally controlling state funds”.
On Monday, Sanalla praised “the rapid response” of Libya’s new unity government, which “allocated a billion dinars (around $200 million) as part of the NOC’s budget”.
NOC had warned that funds previously received represented “less than two percent” of what was needed by the company and its subsidiaries for this year. NOC is in the unusual position of having no control over its income. Oil and Gas earnings are paid in to the Naples branch of the Libyan Foreign Bank which is owned by the Central Bank of Libya. NOC, which is not allowed to keep a float, has to indent for every cent it needs to runs its operations.
Libya has seen a period of relative calm since October, when main rival forces from the east and west signed a truce agreement.
The Government of National Unity installed last month has been charged with preparing the country for December elections.
Oil production has also rebounded, reaching 1.2 million barrels per day in December, 10 times average output in the previous quarter.
Production has stabilised but output still remains below the Gadhafi-era level of 1.6 million barrels per day.