Libya's oil industry has revived its oil production faster than many in the industry predicted after the eight-month civil war that damaged export terminals and left oil facilities looted.
Officials of the transitional government expect to reach pre-war output of 1.6 million barrels per day (bpd) by the end of next month. At the centre of the push in reviving that capacity and potentially going for the 3 million bpd Libya pumped four decades ago is the country's National Oil Corporation (NOC). The National spoke to Ahmed Shawki, Libya's head of crude marketing for the NOC.
Can Libya get back up to 3 million bpd?
Yes, it's possible. It depends on the policy of the Libyan government. But there are technical issues and economical issues and some other social issues and also infrastructure issues. Libya used to have 3 million barrels per day in the early '70s. Then, due to bad management and a lack of investment and no re-exploration, the reservoirs were depleting very fast, and there was nobody renewing those reservoirs. So over maybe 15 years, there was no real investment in the oil - only just to keep it operating, but not real investment.
Also, we had many crises during the Qaddafi era. First we had the US sanctions in the '80s, then we had the Lockerbie crisis. We had many because Libya was sponsoring terrorism at that time. For about 30 years it was not possible even to invite anybody to invest in Libya to do business because the environment was unstable.
So is this finally the moment to reach that target of 3 million bpd?
Yes, it's finally the moment. But, also, we have to take into consideration the technical issues, because you cannot just say in one day I would like to be at 3 million [bpd]. There are technical issues to be tackled, and also the safety of the reservoir. This is a depletable resource, and you would like to stretch it as long as you can for the benefit of the people. It's better that you have a steady income than you have it in one shot.
What do you think is the right policy?
If you go and check the Libyan economy, you see that the money reinvested in the Libyan economy - the income coming from oil, which is reinvested to establish a diversfied economy - is very limited. It's only 9 per cent, or something like this. This is among the lowest ratios in the world, the reinvested capital. So this is a main issue. The government should look into this and how to reinvest in productive things, not only just to service or infrastructure. We also should move to the knowledge economy. With the knowledge-based economy we can export a lot of know-how. I think Libya - with a good government, good planning, good strategies - can reach this very easily.
Are you seeing foreign partners in oil production and investors come back as quickly as they need to?
Yes, I think all the companies, management-wise, they are there in Tripoli. But as for the expatriates or people who are working in the fields, they still [are not all back]. The security companies like to do big business in Libya, so always they keep saying "this is not secure", just to secure business for themselves. But the reality is it is very secure - otherwise how could we have reached this level of production?
(Source: The National)
