Libya's state oil firm needs $17 billion to reach 2 million bpd -NOC chief says

Libya's oil state firm the National Oil Corporation (NOC) needs a budget of $17 billion to increase national oil output to 2 million barrels per day in three to five years, its chief Farhat Bengdara said in an interview.

Bengdara told Alwasat tv on Sunday there were no obstacles to increase the output but "there is a lack of funding, not in the way it should be."

The NOC has a plan that includes projects stabilizing production and maintaining pipelines and equipment, and projects for increasing production, Bengdara said.

The main projects that would help to increase national oil output are related to maintaining the pipelines that were installed in the 1960s, Bengdara said.

"These pipelines have expired and must be replaced," Bengdara said, saying the issue was their "greatest challenge".

"We promised to reach 1.3 million bpd and we have reached 1.295 million bpd before the end of the year. But we are talking about infrastructure that was built in the 1960s and had never been maintained, Bengdara added.

Oil production is Libya's main economic source and it represents approximately 90 percent of the economy of the entire country.

However, the political division between two administrations vying for power in the east and west, casts a shadow over the possibility of investing more to raise production in Libya, particularly after holding general elections to unify the rival parties in 2022 failed despite UN efforts.

The rival factions have repeatedly argued over the control of oil production and revenue, which fuel the political chaos and threaten to undermine the peace process.

According to data published by the Central Bank, exceptional financial arrangements have been referred with a value of approximately nine billion Libyan dinars, some $1.8 billion, during the first 10 months of this year to NOC.

He said there was support from the Government of National Unity (GNU) and the central bank. The government approved a project aimed at replacing pipelines that flow from fields in the Oasis and Sirt Gulf basin to Es Sidra and Ras Lanuf ports.

"We also have a project to replace a part of the eroded pipelines from the Messla and Sarir fields to the port of Hariga, and another project of a line from El Sharara field to the port of Mellitah," he said.

Since the fall of Muammar Gaddafi in the NATO-backed uprising in 2011, oil production has been repeatedly hit in the OPEC member and third largest producer in North Africa by groups blocking facilities, sometimes to demand material benefits but also as a tactic to achieve wider political ends.

"We lost 70 per cent of our storage capacity due to wars," Bengdara said.

He added the plan was supposed to lead the country to 2 million bpd "if there are no problems or developments beyond our control."

Bengdara, a central bank governor before 2011, was appointed as the NOC chief in July, 2022 by the GNU, replacing Mustafa Sanallah who led the company since 2014.

Reporting by Libya's Reuters newsroom; editing by David Evans