Libya Posts Around $7B in Oil Revenue for First Six Months

Libya's oil revenue for H1 2023 declined year on year, while royalties and fuel sales also fell. NOC aims to boost production with expansion plans."

Story By Jov Onsat |RigZone| Libya’s oil revenue excluding royalties and fuel sales slid to around $7 billion (LYD 33.4 billion) for the first half of 2023 year on year, according to official data.

The North African country, whose oil reserves count among the biggest in the continent, collected nearly $8 billion (LYD 37.3 billion) in oil revenue excluding royalties and fuel sales for the same period last year.

In May the National Oil Corp. (NOC) briefly closed the Mellitah oil and gas complex. The facility has a daily capacity of 695 million standard cubic feet of gas and 31,000 barrels of liquids. It can also produce up to 450 tons of solid sulfur, according to operator Mellitah Oil & Gas BV, a 50-50 venture between the NOC and Eni SPA.

Libya’s state-owned petroleum company said on May 1 it was temporarily shutting down the integrated processing complex for renovation. On May 17 the NOC announced the restart of the facility.

A gas well on the Bahr Essalam field in the complex had just resumed operation after stopping in January 2021 “due to technical problems”, as announced by the NOC on April 9. Gas well CW04 can produce up to 37 million cubic feet of gas per day, according to the owner.

But Libyan fossil fuel production got a boost with the startup of the Erawen oil field on March 29 at a rate of 3,000 barrels per day (bpd) and the Ras Lanuf industrial complex on May 12, according to the NOC.

Gross receipts from oil royalties, however, also fell in January-June 2023 to approximately $977 million (LYD 4.7 billion) from over $1 billion (LYD 6.4 billion) in January-June 2022, the central bank reported recently. Libya logged an increase of more than $353 million (LYD 1.7 billion) in oil royalties between May 2023 and June 2023.

The Central Bank of Libya registered over $10 billion (LYD 49.5 billion) in total revenues in the latest review period, including residual oil royalties from previous years.

Oil accounted for about $22 billion (LYD 105.5 billion) or around 78.5 percent of Libya’s total public revenue of approximately $28 billion (LYD 134.4 billion) last year, including remaining oil royalties from previous years, according to the state bank. The oil revenue figure excluded approximately $3 billion (LYD 13.6 billion) in oil royalties and about $55 million (LYD 265 million) in domestic fuel sales.

Tax revenue contributed around $291 million (LYD 1.4 billion) in last year’s collection to be the biggest non-oil component of the economy.

Production Expansion

The NOC is aiming to raise output to two million bpd, it said announcing its approved plan for 2023-27 on March 30.

Early this year the NOC and Italian global energy giant Eni signed a deal to invest about $8 billion into “a strategic project aimed at increasing gas production to supply the Libyan domestic market as well as to ensure export to Europe”, as stated in an Eni announcement January 28. Targeted to come onstream 2026, the project has two structures with a combined gas production of up to 750 million standard cubic feet of gas per day.

On March 27 the NOC announced the signing of an agreement with the USA’s Honeywell UOP for the front-end engineering design of its South Refinery. “The refinery will start operating in the south within 36 months”, NOC chair and chief executive Farhat Bengdara said in a press statement. “Through our contract with Honeywell UOP, we seek to increase the production capacities of the refineries in Zawia, and to find suitable and available solutions for the Ras Lanuf refinery”.

On May 11 the NOC announced an oil discovery on Block 4 of the Ghadames basin. The exploration success in wildcat well F1-82/04, about 205 miles south of Tripoli, is the third discovery in Contract Area 82, where the Libyan state holds an 89.5 percent stake and Tatneft PJSC of Russia has a 10.5 percent operating interest. “The achieved flow rate is 1,870 BOPD [barrels of oil per day] from Devonian and Ordovician sandstones by certain choke size according to the Libyan legislation”, the NOC said.

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