Repeated blockades of Libya’s oil could leave the country producing just half of its total capacity in the coming years as delays in maintenance and depleted budgets take their toll on facilities, the National Oil Corp. said.
The OPEC member is “on track for a precipitous decline over the next year and a half as a result of the illegal blockades,” the state oil firm said Tuesday. Urging an immediate lifting of the stoppages, it estimated production could decline to 650,000 barrels per day in 2022, in part due to “the state’s failure to provide the requested budgets to address the many challenges” that had arisen.
The North African country was pumping an average 1.22 million barrels per day in January before supporters of eastern commander Khalifa Haftar forced a stop to production in the east, home to many of the largest fields and ports. The NOC has previously said talks are underway to allow for output to resume.
Nine years of civil war, including the most recent conflict between the internationally recognized government in Tripoli and Haftar’s forces has caused repeated closures of its oil facilities and canceled much-needed maintenance in the country with Africa’s largest crude reserves.
Read: Revival of Libya’s War-Torn Oil Industry to Be Slow and Costly
“Some of the damage we have suffered is permanent and can never be repaired,” NOC Chairman Mustafa Sanalla said in the statement.
Sudden closing of oil fields mean “mechanical, structural, chemical and even microbiological changes” and the death or decreased production of some wells, the NOC said. Bacterial growth in some fields may also change the composition of the Libyan crude that’s been known as low in sulfur, “making it less valuable,” it said.
The oil blockade has cut income for the Tripoli-based Government of National Accord, in turn limiting the funding available for spending on the production facilities, the NOC said. The central bank has put losses caused by the blockade at $7 billion.
Between 160 and 260 wells will have to undergo repair operations at a cost of between $50 million and $100 million, according to the NOC. Fixing the pipeline network, covering more than 6,760 kilometers (4,200 miles), as well as surface equipment will require significant funds, it said.
“Continuing the blockade only makes our long-term problems worse,” the NOC said. “It is vital that we resume oil production as soon as possible.”