NOC Controversy Clouds Libya's Upstream Outlook

Libya is promising a new foreign investment drive after the controversial replacement of National Oil Corp. (NOC) chairman Mustafa Sanalla with ex-central bank governor Farhat Bengdara last month. Libya's up and down oil production is on the rise again, hitting 1.2 million barrels per day recently, with August exports set to reach 1.01 million b/d. If political stability can hold, long-delayed oil sector investment and reform could be back on the table, improving the outlook for the Opec country's output at a time when oil markets are fretting over dwindling spare capacity. Indeed, Libya is keen to develop its oil wealth before its fields become stranded assets, Libya’s Oil Minister Mohamed Oun tells Energy Intelligence. European oil majors have remained significant investors in Libya over the past decade during the country’s civil war. Now, amid tight global supply, Libya could be more attractive due to its low extraction costs, infrastructure and geographical location as Europe turns its back on Russian hydrocarbons. After Dbeibeh replaced Sanalla, NOC lifted force majeure declarations on Jul. 15 at Libya's oil fields and loading terminals where petroleum facilities guards and workers had been on strike at eastern ports of Es Sider, Ras Lanuf, Zueitina and Marsa al-Brega over salaries and grievances. Dbeibeh dismissed Sanalla after he refused to step down. Sanallah had accused Dbeibeh of alleged collusion with the United Arab Emirates over oil supply and services contracts — charges which Dbeibeh has denied.