Libya lost $1bn in oil industry chaos
Baku, May 1 (AZERTAC). Libya`s getting ready to launch a new oil licensing round to boost production but there`s widespread skepticism the country will be able to pull it off with armed militias still running wild 18 months after Moammar Gadhafi was toppled.
Libyan Oil Minister Abdelbari Ali al-Arusi told the Financial Times that a new oil law to regulate Libya`s energy industry is being drafted that will pave the way for a licensing round by the end of the year.
Arusi said the government, having restored oil production to pre-2011 revolution levels of 1.55 million barrels per day, seeks to raise output to 1.7 million bpd after sorting out power supply problems.
The minister said that "if all goes well" the law should be in place within four months.
However, political analysts and industry insiders "say they are skeptical that Libya`s political circumstances will permit a consensus on the legislation which will organize exploitation of the country`s hydrocarbons wealth," Libya`s economic backbone, the Financial Times observed.
The oil industry has been constantly disrupted by heavily armed militias, usually based on tribal or regional loyalties. Locals demanding jobs have been blockading facilities and shutting export terminals.
This has cost Algeria an estimated $1 billion in five months, Arusi says.
On top of this, militias are a major drain on government resources since they`ve been put on the state payroll in a bid to harness them. This has swollen the public sector salaries bill to $16 billion in 2013. That`s more than double the $6.6 billion allocated in the 2010 budget under Gadhafi.
There seems no let up to the political violence that the government seems totally incapable of controlling.
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