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Instability in Libya’s oil production resurfaces

Once again, instability loomed over the oil sector in Libya, a few months after the resumption of production and the lifting of force majeure last September.

The Head of the media department of the Arabian Gulf Company, Ahmed Al-Oraibi, confirmed in a statement to 218News om Sunday that the company decided to stop production due to the delay of budget.

Al-Oraibi explained that the Arabian Gulf Company has not received any money from September 2020 until April.

The statements of the Minister of Oil and Gas, Mohammad Aoun, do not reflect the size of the current problem, as he said in a statement to Bloomberg last March that the ministry will obtain a budget of $1.6 billion –  equivalent to more than seven billion dinars – in the remaining months of the tenure of the unity government, and the ministry did not clarify what the stage of reaching the work in the file of clearing and whether there are exceptions for the oil sector obtaining the allocated budget even before the budget is approved.

On the other hand, the National Oil Corporation did not comment on the decline in production and what is going on behind the scenes of the fields managed by the Arabian Gulf Company.

Financial experts and economists in Libya have expressed their fear of reducing production, citing a bad period that brings back memories of the years 2013 and 2016, when Libya lost $100 billion as a result of the closures and the period between January and September of last year, in which Libya lost $10 billion.

Observers have warned in the last hours of a further reduction in production, as oil revenues finance the public treasury by 95%, as well as anchoring the plan to adjust the official exchange rate of the dollar at 4.48 dinars, expressing their fear of the continued devaluation of the dinar in front of foreign exchange and commodities, rising inflation rates, and the country’s entry into an unknown tunnel.

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