Despite Turmoil Libya’s Oil Production Remains Steady
Despite the ongoing turmoil marring the country, Libya oil’s production remains steady following the rebound in productivity levels witnessed after last month’s reopening of the Ras Lanouf and Al-Sidra ports and of the Sharara oil field. As confirmed by the Monthly Oil Market Report released today by the OPEC, during the past month Libya’s oil production consistently broke the 500,000 barrels a day mark for the first time since last January, bringing much needed relief to the country’s economy. Nonetheless, the oil sector has still a long way to go before reaching pre-war or late 2012 production levels. Reuters Graphic put together a very clear infographic highlighting this and documenting the fluctuating levels of Libya’s oil productivity during the post-Qadhafi years.
Furthermore, even though oil infrastructures have been spared by rival militias during ongoing clashes, it is still to early to breath a sigh of relief. As the events of Tripoli’s airport have demonstrated, zero-sum logic and the desire to undercut opponents’ sources of income might lead rivaling factions to engulf oil infrastructures in military clashes. This should be taken into consideration especially now, with reports indicating that Zawiya’s oil port is a mere 20km away from clashes, the need to implement a stable ceasefire deal and to launch a national dialogue aiming to mend fractures in the country’s socio-political landscape is more pressing than ever.
Laslty, David Samuels on Bloomberg Bussinesweek wrote a very interesting piece documenting the attempts made in the past years at tracking Libya’s assets stashed abroad during Qadhafi’s rule and how this process led to further squandering of identified funds for short-term political gains:
When asked to provide an example of how this scam works, Hamroush says Ireland has $2 billion in Libyan assets. She knows the exact sum, she says, because Irish officials made a point of telling her how much money they had and where it was located. She took the information to Mustafa Jalil, head of the National Transitional Council, at which point at least one group of asset hunters applied to receive 10 percent of the total, she says. “Somebody in the NTC is either a complete idiot or an evil genius,” she concludes. “Money is being squandered everywhere like mad.”
Giveaways to individuals and militias from Libyan state coffers during her time in office from November 2011 to August 2012 amounted to $20 billion, according to her own estimate. In addition, the government, to buy loyalty, pays 40 percent of the adult population a salary at a cost of about $6 billion a month. While that figure could have easily been covered by oil revenue during Qaddafi’s time, the country’s production is now less than a quarter of what it was. Today, the practice of loading up the budget with public salaries in order to buy public loyalty has continued—but with a difference. “Now there are two or three times as many salaries as before,” Hamroush says, and they are being paid out of the state’s foreign reserves. At the rate that they are being used, the reserves will be entirely depleted in two years.