Libya output up amid contract dispute

Libya

TRIPOLI, May 10, 2017 – Crude output in Libya has risen above 800,000 bopd for the first time since 2014, the National Oil Corporation (NOC) announced on Wednesday.

Production has fluctuated in recent months as tribal conflicts have at times shut down key fields.

Nevertheless, output today would be close to 1 million bopd were it not for a commercial dispute with BASF subsidiary Wintershall, which operates eight oilfields in the country, the NOC added in a statement.

Libya’s state oil firm blamed the disagreement on Presidency Council Resolution 270, which it said gave the government excessive powers to negotiate agreements with IOCs. It did not name the specific reason for the dispute, but an anonymous industry source told Reuters that the NOC demanded that Wintershall fulfil a 2010 commitment to switch to a production-sharing agreement, something the German firm had declined to do.

“The Libyan people, out of whose pockets money is being taken, need to know that Resolution 270 was drafted with the assistance of Wintershall to benefit Wintershall,” NOC chairman Mustafa Sanalla said in the statement, adding that he had asked the Presidency Council to withdraw the resolution.

“We are able produce an average of 1.1 million-1.2 million bopd over the rest of this year, but for this to happen our oil must flow freely,” Sanalla said.