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The chairman of the Libyan National Oil Corporation Shokri Ghanem resigned from his position earlier this month. Shortly before doing so, he gave one final, exclusive interview to ArabianOilAndGas.com.
What is the current oil output of Libya?
Our current oil production is 1.5m barrels per day (bpd) because of the OPEC quota, but the capacity is 2 million bpd and we are working to increase that. We have many programs where by the year 2012 it will be 2.3 million bpd and hopefully by the year 2015-2016 it will be around 3 million barrels.
We used to produce 3.2 million barrels per day but it went down because of the embargo. Regarding gas, we are producing about 14bn cubic metres of gas per year and most of it goes to Italy through a subsea pipeline. We also have an LNG plant, but the plan is that we are going to revamp the existing plant. Shell is going to build another gas plant once their gas discoveries prove to be enough for another gas train, also Eni will build another train in the western part of the country.
What major projects are already underway?
Libya has opened its doors for foreign investments to begin with upstream. There are almost 50 companies working in Libya, all of them are working in exploration and a lot have found oil and gas, and it needs to be developed. There are number of projects in gas as well as refinery projects as we are looking for participation of foreign companies. It’s the same thing for petrochemical; we are going with Dow and Fertiliser with Yara International.
The major projects are the revamping of the capacity of the gas plant in Brika, the plans to increase gas production by 4bn cubic meter per year in the western part of the country and the possibility of building an LNG plant there.
What is the situation with your budget?
The budget of the NOC, we are going to invest about US$7bn this year in development and so on, then the oil companies will also invest between $2 billion to $ 3 billion.
For the next five years we are earmarking $42 billion for investments in exploration and development, while in the downstream, we decided to go in joint venture with foreign companies. We are revamping Ras Lanuf and Zaway and it will cost a few billion dollars.
What are the major challenges facing Libya?
Hopefully demand will increase and we will continue with our plans because if the oil demands decrease, which I am not expecting, then the income will go down, and since the NOC is a governmental company the major challenges whether we can get enough from the government to finance our project. Financing is very crucial.
What do you think is a fair price for oil?
We have to accept whatever the market gives because we can’t affect the market very much. I think the $70 to $80 dollars as an average per year will be conducive to achieve our goal, but we expect it to be higher than that.
What is the employment situation in Libya?
We are trying to Libyanise everything. We are asking all engineering companies to do their work in Libya and open offices. Building capacity is very important for us.
Shokri Ghanem: in profile
• Born in Tripoli, Libya October 9 1942
• Married with three daughters and one son
• Boston University, gaining a PhD in international economics
• Director, Research Division, OPEC Secretariat, Vienna, Austria, July 1993–July 2001
• Secretary, General People’s Committee for Economy and Trade, 2001 – 2003
• Secretary of the General People’s Committee Libya, June 2003–March 2006
• Chairman of the National Oil Corporation, April 2006 – September 2009.
