By Sami Zaptia.
London, 22 August 2019:
Faiez Serraj, head of Libya’s internationally recognized Presidential Council and Government of National Accord, held an expanded meeting yesterday to discuss increased investment in the country’s oil sector.
The meeting was attended by the Ministers of Planning and Finance as well as the Governor of the Tripoli Central Bank of Libya (CBL), the Chairman of the National Oil Corporation (NOC), the head of the Audit Bureau, and the head of the Libyan Investment Authority (LIA).
The meeting dealt with increased investment in the oil sector and the implementation of plans to develop it more effectively to achieve additional financial returns to Libya that would contribute to the revival of the national economy in its various fields.
This is with the aim to improve and develop the public services sector and implement development and reconstruction projects in various regions of Libya.
The Serraj government reported that there was extensive discussion on an additional funding provision for the NOC in the coming period to implement this vision.
It also reported that it was agreed to set a legal budget to start investing in the oil sector which is the primary source of revenue for the country.
This is so as to enable the NOC to raise production, increase export rates and perform its overall tasks for production, exploration, refining and transportation of crude oil and products – as part of its development plans in the coming years.
It is noteworthy that the LIA manages an investment portfolio in the field of oil and gas and owns shares, assets and companies in this field and has many partnerships in exploration projects with the largest international companies.
After participating in the above meeting, the LIA confirmed that it “seeks to build a real strategic alliance with the NOC in order to increase production rates and continue exploration projects”.
It will also be recalled that the NOC has been asking for an increased maintenance and investment budget for years – without much success.
It has argued that since oil is the overwhelming source of revenue for Libya (92 percent of 2019 budget) in the short and medium term, the Tripoli government should allocate it an increased budget in order to secure more oil production, exports and hence revenues.
This is especially so since the non-oil economy is stalling badly due to a myriad of reasons including the country’s lack of security.
However, the political instability of the country and weak central and institutional control has meant the majority of Libya’s budget is spent on state-sector salaries (58 percent) and subsidies – rather than on investment and development projects (5.3 percent).