Libya's oil production rises and intercepts the deal of the century

Libya's oil production rises and intercepts the deal of the century

Libya's oil and gas production is likely to increase in the midst of the economic movement, of the Libyan society, Economic and audit programs that are working on the process of preparing economic development in the world of oil and gas.

Production levels of Libyan oil amounted to 1.28 million barrels per day as reported in the November 2018 reports, meaning Libya's production of oil has doubled in productivity.

Production from Libyan oil has increased dramatically despite cuts by OPEC, the Organization of Petroleum Exporting Countries (OPEC), with Libya's production in the latter half of the year rising to its highest level in more than five years.

But Libya, rich in oil and gas, is struggling with the financial, administrative, economic and social corruption with political and sovereign divisions in its national institutions, in which Libya is rethinking its use of oil resources to reverse the impasse since its revolution in 2011.

Oil production facilities have been repeatedly attacked in recent years for terrorist attacks and seizures by warring militias. In September, the US State Department, in cooperation with the United Nations, imposed sanctions on a prominent Libyan militia leader for kidnapping vital oil facilities in June.

While the Libyan population sits on Africa's largest proven oil reserves, its population feels no benefit, as the United Nations estimates that more than 40 percent of Libyans live below the poverty line.

Among the deadlock and problems that Libya is facing in protest positions organized by oil sector workers in nine Libyan oil fields is an increase of 67% in basic salaries and the disbursement of late increases to the oil sector through the next year's budget for 2019.

Libya's internal subsidy was met by the understanding of the OPEC community, the difficulties Libya has faced and the Libyan oil production cuts in the past. OPEC is keen to keep prices unchanged. Libya and Nigeria have been exempted from OPEC reductions since January 2017 due to internal disputes.

With oil prices rising from the falling market and down from a four-year high in the longest losing streak in 34 years, OPEC is in talks with Libya and Nigeria on a cut-off deal in productions.

Saudi Arabia, the world's largest exporter of 15-member cells, says it needs to produce about 1 million barrels per day (bpd) and concerns about oversupply come after Saudi Arabia initially moved to boost stockpiles ahead of US sanctions on Iran's energy sector.

In order to return for higher productions, the Libyan national oil company is to build its energy industry since crisis of the 17th revolution, its total oil exports have increased to 3.5 billion US dollars so far, more than last year, and 1.7 billion dollars to China in 2017.

The withdrawal of Qatar from the OPEC from next year to 2019 was a decision to decline its influence and political isolation, and the responses of the role of Saudi Arabia and the United Arab Emirates and Russia, which dominates the oil market.

Many locals see Qatar's exit as unaffected by Qatar's oil production, but Qatar gas production, which is the most important, has been increasing by 10 percent annually to 110 million tones a year by 2024.

As for Libya, rethinking the political factor is Palermo's belated meeting in Italy, which will provide some political optimism for Libya, which is working to turn the stalemate and change the pattern of thinking between the divided political poles.

Marshal Khalifah Hafter is in controls of the eastern part of the country, and Prime Minister Fayez Sarraj, on the other side of the national reconciliation government in the Libyan capital of Tripoli, in the western region, working to support the UN plan for elections next year.

The political factors in Libya are tangled with the economic and security work. The depression that Libya suffers today is those factors and the lessons learned from them in some narration and in the flow of negative emotions spread in every aspect of the Libya.

What is happening in Libya is the division between East and West and the accumulation of financial problems both in the general budget of the Libyan state or in the follow-up of the disbursement of the general budget.

Libya will certainly continue with the OPEC countries and pump the current record levels of Libyan crude oil.

"Long-term oil production is likely to continue to rise as a political agreement would facilitate further investment in Libya's oilfields," Eurasia Group consultancy said in a research note last week.

Marshal Khalifa Hafer, who was opposed to the elections, believes he is now more supportive of early elections to capitalize on his growing popularity toward Seraj.

Elections are likely to be complex, and the extent to which all stakeholders and factions in Libya accept the results is uncertain.

Marshal Khalifa Haftar controls the oil crescent in the eastern Gulf of Sirte, which includes four major ports that make up the lion's share of Libya's oil exports, the four sites are the main sources of much-needed hard currency Libya today.

The Government of National Reconciliation relies on the Libyan armed militias to impose order in Tripoli and has so far not been able to take absolute control and has failed in its attempts to demobilize the fighters and integrate them into the structures of the official Libyan state or a regular Libyan national army.

Most of the Libyan armed militias are scattered militias that are not interlinked and often clash with each other, reinforcing the possibility of Marshal Khalifa Hater’s military capabilities to expand areas under the control of the Eastern Base.

Many of us are in the last resort to the presence of two forces involved in finding solutions to the Libyan crisis interlocking, regardless of who has more interests in Libya and the ability of the two forces to impose a century deal on the reality of the Libyan nation, which mentioned in the introduction of the article objection.

Italy and France have extensive investments in Libya's oil sector, in addition to its geographical proximity.

Libya boasts its relatively inexpensive oil resources for extraction, oil quality and exports to the world.

The events are accelerating and signaling the occurrence of an event that is not in the interest of the Libyan nation against its will, a frightening reality torn between Libya between the conflicting parties politically and militarily, between the conflicting political poles and between the countries of the region and neighboring countries to Libya, including Tunisia and Arab Egypt.

Eni has always been Italy's largest foreign producer, although Total is gaining strength, earlier this year, the company acquired a 16% stake in the Waha concession in the Sirte basin, demonstrating renewed confidence and recognition of the opportunities offered by the energy sector.

That the Sicilian Palermo conference was an important step in resolving the conflict and pushed the arrival of Marshal Khalifa Hafer to Rama to meet with Prime Minister Giuseppe Conti again.

Today, the demands of the quality of work are the recognition that Italy is the indispensable state in the international game and the process of reconciliation and convergence of views between the two parties in the east and west of Libya.

It seems that today all the stakeholders agree that the elections are necessary to jump start the process of unification of the country and ends it is war, but there are still differences on how to get to the end of the tunnel dark and to remove Libya from political and economic crises, establish sense of security, and push economic development for the recovery of the Libyan nation.

By Professor Ramzi Halim Mavrakis

Businessman - Libyan political and economic writer and analyst