Oil firms in Libya must return fast to restore production
With infrastructure damage from Libya’s six-month conflict fairly limited, foreign oil companies should return as fast as possible to restore oil production, the interim administration’s reconstruction minister said Friday. In an interview with Reuters during a meeting with donor groups and post-conflict rebuilding experts, Ahmad Jehani said oil would be key to getting the economy running again and foreign contractors were needed for their technical expertise.
“The issue of damage is not much and you can get procurement very fast. This is helped by fact the producing wells are under contract to international firms, if they feel they can deploy their people,” said Jehani. He could not say how quickly Libya, which has Africa’s largest oil reserves and boasts top-quality crude, could see its output back at pre-war levels of 1.6 million barrels per day. “We could go back to normal levels if you have the companies coming back to operate fields and then they can judge,” he said. “The parts under Libyan management we could get up very fast.”
Separately, the head of the interim council’s Libya stabilization team, Aref Ali Nayed, said employees from five foreign oil companies were already in Libya working to restore infrastructure and get operations running again. He said the five companies included Italy’s ENI.
In general, infrastructure damage from the fighting that drove Moammar Gadhafi from power last week was limited, and the priority was to get basic services up and running and paying salaries, before repairs can start, Jehani said. “A lot of the damage is concentrated in certain areas like Misrata and the Nafusa Mountains,” he said. “In general there has not been major damage.”
Jehani, who worked at the World Bank for 30 years and recently published a book on OPEC and international law, said he hoped the swift unfreezing of $15 billion in Libyan assets, as pledged by world powers Thursday, would reduce the need for any loans. “We are not seeking any bridge financing at the moment, we are only after our own money,” he said. He declined to give an indication of how much money the interim council needs today, saying only that before the conflict began the Libyan budget for salaries, subsidies and running the government was estimated to be around $20 billion for 2011. He said the National Transitional Council would work with bodies such as the United Nations, World Bank and International Monetary Fund to reach estimates on the cost of rebuilding. He said damage assessment should be done within two months.
Jehani also said the NTC members would step down once elections have been held, but did not commit to any particular time frame. “Once we get up and running, we will disappear into the sunset,” he said.
- UAE economy minister predicts a rise in oil prices
- Experts meet ahead of Saudi-Bahrain pipeline development
- US offers $5 million reward for tips that would help take down Daesh’s oil trade
- Plummeting oil prices may drive diversification in the GCC
- Better together? More mergers foreseen after $70 billion Shell takeover of BG