Libya’s National Oil Corporation (NOC LIBYA) Chairman, Eng. Mustafa Sanalla, spoke about the importance of foreign investment and the participation of international companies and expertise to assist the development of the Libyan Oil & Gas sector.
We are pleased to share Eng Mustafa Sanalla’s keynote speech from the Libya Investment Forum event held on 9 June 2021 as follows:
I first would like to take this opportunity to thank the Libyan British Business Council jointly with the prestigious Petroleum Economist Magazine for organizing and facilitating this important virtual event. I would also like to thank representatives of IOC’s, Service companies, law firms and all representatives for their participation.
Let me start by highlighting the latest developments in the Libyan oil & gas sector.
As you all may know, the Libyan oil and gas sector has faced many setbacks in the last few years due to armed conflicts and disorder. This had led to the closure of many oil and gas fields and export terminals. This resulted in an extreme reduction of our daily production for prolonged periods of time. Our crude oil production went down repeatedly to as low as 100 thousand b/d, 7% of our regular production capacity. The prolonged shutdown of our production and export facilities caused excessive corrosion and damage to equipment, storage tanks and pipelines consequently limiting our capacity when these facilities were gradually put back online. Furthermore, a number of oil fields (Ghani, Dahra, Mabruk, Zella,) were vandalized and virtually destroyed by raging intruders. These fields need an extensive rehabilitation to bring them back online. The NOC and its affiliated companies and partners were always up to the challenge and we could repeatedly bring back our production to more than 1 million b/d and I take here the opportunity to commend the courage and sacrifices of our champions in all operating sites.
To restore and upgrade the damaged facilities, and rehabilitate the destroyed fields, the NOC is planning to launch a number of projects which will be covered in Session 3 of this Forum. It is important to highlight here that the NOC is facing tremendous challenges in the rehabilitation and restoration of its damaged fields and facilities. Among the challenges are the lack of funds for executing the projects, the reluctance of the engineering and construction contractors to mobilize their manpower to the work site due to lingering insecurity and the vulnerable and fragile political situation. Nevertheless, the NOC has recently lifted the Force Majeure status on several damaged fields to allow the commencement of rehabilitation work.
In addition to restoring our oil and gas production to the pre-crises level, the NOC had put together an ambitious plan to increase oil production to 2.1 million b/d and gas production to 4.1 billion scf/d both onshore and offshore. The plan comprises; exploration, new field development, In-fill drilling, water injectors, well workover and intervention and rehabilitation of damaged facilities. Huge investments are needed for the execution of these ambitious projects to meet our new production targets.
Local gas demand for power generation and for heavy industries continue to increase with the construction of new power plants and expansion of many industries. To attend to this , the NOC is dedicating special attention to developing the discovered gas fields on priority basis both to meet the increasing gas demand and to free liquid fuels that are currently being used for power generation and direct them to export. Reservoir studies, field development plans, and engineering studies are already underway for a number of gas discoveries both onshore and offshore. This includes; Hamada NC7, Atshan NC200, A&E Structure in Area D offshore, Bouri Gas Utilization Project (GUP), Arous Elbahar gas field, Sarir/Misla Gas Utilization, Fariegh Phase II.
The NOC is also keen to tap in the renewable energies to satisfy part of the power needed to run our facilities. This is more important now adays due to the great development in renewable technologies and economics in addition to reduction of carbon emissions. Deliberations with our partners and some specialized technology providers and firms are under way to explore this option.
Oil and gas revenues currently represent 95% of Libya’s export earnings. The NOC is making great efforts to ensure that the country’s oil & gas resources are wisely and sustainably produced, monetized and turned into the badly needed income for the development of the country and for improving the welfare of the Libyan citizens. Rebuilding, expansion and modernization of the damaged infrastructure will only be possible with this income.
The large projects involved in this will require huge investment and would require the involvement and assistance of foreign investors and service providers. We understand that any successful and long-lasting partnership will have to be based on a win-win relationship and the NOC is doing some preparatory work in preparation for the upcoming stages (the review of our EPSA Model is an example).
With a fair and mutual cooperation, we hope to achieve the following;
- Share the burden of projects funding.
- Generate reasonable returns for the investors.
- Explore and exploit new concession areas for maintaining and enhancing our proven oil and gas reserves.
- Develop & produce new fields, rehabilitate damaged fields, and improve the production, processing and export
- Introduce and implement the latest technologies in the fields of Exploration data processing and interpretation, Improving drilling methods and efficiencies, EOR & IOR development projects, chemical treatment, gas flaring elimination and water treatment to name view.
- Transfer technology and knowhow to the Libyan Nationals.
- Enhancing local content ( materials, manpower, services).
We understand also that this can only happen in an environment of security and stability, and we are very optimistic about the latest political development and the formulation and inauguration of the National Unity Government and we hope that the future is only better. Some positive changes are already underway including; uniting of government institutions, planning for general elections towards the end of this year, the return and reopening of some foreign embassies, international institutions and companies.
Finally, the future of the oil and gas sector in Libya is undoubtedly bright and promising and offers excellent opportunities for foreign investors and service providers. your attendance here today only feeds our optimism. Again I thank you all for your participation and I wish you a successful event and deliberations and I hope we soon return to in-person meetings and direct networking when the current unprecedented pandemic behind us.