Low spending on Libyan oil sector threatens crude exports

The Chairman of the National Oil Corporation, Mustafa Sanalla, warned that the current production figures for Libyan oil could decline at any moment, due to the lack of funding, which resulted in a lack of maintenance and the deterioration of the sector’s infrastructure.

Sanalla added that the oil sector faced major problems in obtaining the required budgets, as the unity government provided only 11% of the required budget despite receiving $26 billion in 2021, which is the highest oil revenue since 2013.

These statements raise fears of Libya’s inability to keep pace with the increasing global demand, especially in light of the Russian-Ukrainian crisis and the direction of neighboring Europe to Libya to search for alternatives to Russian crude, as the Libyan destination is among the solutions offered because it possesses reserves exceeding 48.4 billion barrels.

The professor of finance and investment at Nottingham Trent University in Britain, in a statement to Sky News Arabia, ruled out the ability of the Libyan oil sector to increase production at the present time, as a result of the conflicts that the country went through and the lack of spending on infrastructure, which negatively affected transport lines and storage and export ports, stressing that the sustainability of current production needs urgent investments from the government.

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