Libya’s National Oil Corporation (NOC) is struggling to meet its ambitious oil and gas sector goals, the lifeblood of the country. Recent production gains were achieved through a drilling partnership with multinational oilfield services company Schlumberger (SLB). However, the company is now threatening to withdraw due to unpaid dues.
On 9 June, Farhat Bengdara, Chairman of the NOC, informed Abdel-Hamid Dbaiba, Prime Minister of the Government of National Unity (GNU), that the NOC aims to gradually increase oil production to over 2 million barrels per day by the end of 2025, up from the current 1.2 million barrels per day.
Daily production data showed an increase to 1.258 million barrels of crude oil (and 53,000 barrels of condensate) on 10 June, a figure that, if sustained for a month, would be the highest since 2013. Baker Hughes’ data indicated the sector reached an 18-year high with 21 drilling rigs in operation in February, according to a report by MEES news website.
Amid this surge in drilling, the NOC highlighted a series of successful well completions, with at least 38 recent successes. These include three wells producing over 10,000 barrels per day in the Abu Attifel field, a joint venture between Eni and the NOC, and three other wells producing 15,000 barrels per day in the El Feel field, also operated by the Mellitah Oil & Gas joint venture.
Schlumberger carried out the drilling operations in the Abu Attifel field. Libyan contracts featured prominently in Schlumberger’s fourth-quarter 2023 and first-quarter 2024 results, giving hope for achieving the NOC’s production targets.
However, these gains are now threatened by Schlumberger’s ultimatum to leave Libya. In a letter dated 9 June to Bengdara, Mustafa Ajaj, General Manager of Schlumberger Libya, cited severe financial difficulties due to unpaid debts owed to Schlumberger subsidiaries in Libya, including Schlumberger Overseas, Dowell Schlumberger, and Anadrill International.
Ajaj detailed debts totalling $242 million owed by 14 NOC-affiliated and other foreign companies. He stated, “Due to unprecedented levels of accumulated debts with our partners in Libya, and after numerous attempts to collect our dues, we regret to inform you that our services will be suspended from next month (July 2024) until the financial settlements are made.”
Despite recent major deals in Libya, Ajaj expressed a desire for a “quick resolution” to the crisis.
The outstanding debts to Schlumberger threaten to reverse Libya’s recent production gains, as the NOC strives to meet its ambitious oil and gas sector goals.
