Mohamed Aoun, Libya’s Minister of Oil stated that current oil production will not be impacted by the recent OPEC+ decision to cut oil production by over a million barrels per day.
On Thursday, OPEC+ reached a preliminary agreement to reduce oil production significantly. However, Aoun reassured that this decision would not affect Libya. He highlighted that OPEC and OPEC+ aim to maintain market balance, in terms of supply and demand.
Aoun also announced the National Oil Corporation’s (NOC) plan to launch an exploration tender in 2024, where Russian companies are expected to participate. This follows the discovery of a new oil field in Libya’s Ghadames Basin by the Russian company Tatneft, marking their third exploration success in the region.
Libya, holding Africa’s largest oil and gas reserves estimated at 48.4 billion barrels, has been producing about 1.2 million barrels of crude oil per day in 2023. The Ministry of Oil and Gas aims to gradually increase this production, with a target of reaching two million barrels per day within three to five years. This goal is tied to the availability of expertise, and transparency in operations.
As Libya works towards increasing its production, the global market is watching closely. The country’s potential in influencing oil supply and prices remains significant, despite the recent production cut.
Notably, Aoun has raised serious allegations against the NOC and its Chairman, Farhat Bengdara.
Aoun has objected to Bengdara’s approval of a $10 million dollar procurement of operational materials from a Dubai-based company, alleging that this decision was made without the required consent from the Ministry.
This issue was highlighted in Aoun’s letter to Siddiq Al-Kabir, the Governor of the Central Bank of Libya (CBL).
According to the letter, Aoun underscored that Bengdara’s decision to greenlight a request by the Sirte Oil Company to purchase materials from the ‘Mediterranean Company’ in Dubai “constituted a clear breach of Libyan oil sector regulations.” He specifically cited violations of paragraph (7) of Article (23) and Article (24) of Decision (10) of 1979, about the reorganization of the NOC.
Aoun emphasized that “such financial dealings warrant the approval of the Ministry of Oil and Gas, a step that was conspicuously absent in this transaction.” As per Aoun, this oversight “represents a flagrant misuse of public funds and a disregard for the established procedures.”
This development is the latest in a series of contentious issues within Libya’s vital oil sector. Aoun has been vocal in his criticisms of the NOC’s operations, including the corporation’s recent agreement with Italy’s ENI.