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Libya Oil Recovery Threatened

The international news agency, Bloomberg, said Tuesday that Libya’s oil production has fallen below 1 million barrels a day for the first time in months as a budget dispute hinders the OPEC member’s ability to fix war-damaged infrastructure.

According to Bloomberg, Hariga was scheduled to load six crude cargoes of 1 million barrels each next month — equivalent to 194,000 barrels a day in total — according to a loading program.

Other domestic producers are also struggling. Sirte Oil Co., another NOC subsidiary, has had to decrease output by about 20,000 barrels a day and more firms may follow suit, according to a person familiar with the matter.

The NOC has long complained it needs more money to fix aging energy infrastructure. Its chairman, Mustafa Sanalla, told Bloomberg last month that daily output could rise to 1.45 million barrels this year and 1.6 million within two years if the company received adequate funds.

“The NOC has long complained it needs more money to fix aging energy infrastructure. Its chairman, Mustafa Sanalla, told Bloomberg last month that daily output could rise to 1.45 million barrels this year and 1.6 million within two years if the company received adequate funds,” the news agency added.

The company said in Monday’s statement that Libya’s central bank bears “full legal responsibility” for the situation after it refused to release 1 billion dinars ($222 million) that the government allocated to the oil sector. The NOC said it’s received less than 2% of the funds it needs this year to meet maintenance and production targets.

The unity government approved a budget last month that allotted $1.6 billion — the biggest portion of development spending — to the state oil company. Sanalla said he was satisfied with that sum.

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