Libya's National Oil Corporation is banking on France's Total to help it boost output and assist with the maintenance of some of its oil infrastructure, it said April 20.
NOC chairman Mustafa Sanalla met with Total CEO Patrick Pouyanne on April 20 where they discussed the upcoming plans of the French energy producer in Libya.
Total is currently involved in increasing output at the giant Waha, Sharara, Mabruk and Al Jurf oil fields. NOC said the development of the North Gialo and NC-98 oil fields is a priority for Total, and production from these sites is poised to rise by 175,000 b/d. These fields are part of the Waha concessions.
Total will also "contribute to the maintenance of decaying equipment and crude oil transport lines that need replacing," according to NOC.
A large part of Libya's aging infrastructure has been wrecked by civil war, militant and terrorist attacks, and general neglect over the past decade.
"Increasing production rates according to short, medium and long term plans, as well as introducing renewable energy [solar] technology to Libya," were also discussed, the NOC statement added.
In 2019, Total and NOC finalized an agreement giving the oil major a minority stake in the Waha concessions, which are Libya's most lucrative set of oil blocks. The concessions have the capacity to produce more than 350,000 b/d.
Total has been keen to increase its presence in Libya, and this follows a tried and tested model for the energy major which has been successful looking for higher returns in risk-prone areas.
"The implementation of these projects will increase production and benefit the areas adjacent to oil operations in the form of social responsibility programs," Ali el-Farsi, a media coordinator at NOC subsidiary Waha Oil, told S&P Global Platts.
Output hurdles
NOC's announcement comes as Libya crude output has fallen by almost 200,000 b/d in the past few days due to a budget crisis.
NOC subsidiary Arabian Gulf Oil Co., or Agoco, has halted output at some of its fields due to the government's failure to send federal funds since September for operations.
The state-owned company said this was "a result of the Central Bank of Libya's refusal to liquidate the oil sector budget for months."
NOC has always warned it may struggle to sustain current production levels if political and financial stability is not maintained.
"The oil sector is short of spare parts and operating requirements due to the Central Bank's refusal to grant NOC the budget," added Farsi.
The North African producer pumped 1.19 million b/d in March, its highest since June 2013, according to the monthly S&P Global Platts OPEC Survey.
NOC is planning to pump 1.45 million b/d by the end of 2021, as some eastern oil fields resume production. However, this hinges on NOC receiving its full annual budget along with improved security at its oil infrastructure, according to NOC chairman Mustafa Sanalla.
Libya holds Africa's largest proven reserves of oil, and its main light sweet Es Sider and Sharara export crudes are sought after by refineries in the Mediterranean and Northwest Europe for their gasoline and middle distillate yields.
