Western-sponsored regime change has not brought about peace, prosperity and the freedom the people of Libya had long yearned for during the Muammar Gadhafi years. Instead, like Iraq, which had a semblance of stability and relative prosperity under Saddam’s iron rule, the country has decidedly become a failed state. And nowhere has this had a marked impact than in the oil industry whose production has dipped sharply.
A vivid picture of the stagnant state of Libya’s oil industry is narrated by the country’s oil head. National Oil Corporation (NOC) Chairman, Mustafa Sanalla, warns that the strife-ridden faced a potential “financial collapse, unless there is increase in oil exports.
“It is no secret we are on the road to financial collapse,” bemoans Sanalla. “We are running a budget with a huge deficit and we have spent half our reserves in the last few years.”
Samalla is not exaggerating the magnitude of the economic woes that Libya is facing as a result of dismally low oil production and exports, which have been the country’s cash cow. To demonstrate the extent of the stagnation – an oil tanker carrying cargo of 776,000 barrels just left the key Libyan port of Ras Lanuf with the first crude shipment from the terminal in two years recently.
Interestingly, during Kadhafi’s reign Libya pumped around 1.6 million barrels of crude a day. But as a result of chaos, the NOC says it has fallen to 290, 000 barrels a day.
As a result of lawlessness, Samalla estimates that since 2013, Libya could have lost more than $100bn.
Libya desperately needs revenue for food, medicine, fuel, electricity, education, salaries and so on. If the situation does not improve the country could go insolvent by 2017, Samalla fears.
Adapted for African Mining Brief Online from a report filed by I-Net Bridge