Libya's National Oil Corporation (NOC) will receive $1bn in funding from the internationally recognised Tripoli government to maintain oil output through 2020, Reuters reported, citing a government document sent to journalists.
According to the document, around $850mn would go towards "projects that contribute in maintenance of current production rates and increase the productive capacity of the oil and gas sector," with the remainder to be used in payments from NOC to other companies. NOC currently produces around 1.3mn barrels of oil per day.
This follows a 2 October statement from Libya NOC which warned that the nation's oil production "may fall precipitously over the next nine months if the government continues to withhold already approved budgets." It continued to note that August 2019 revenues at the companies dropped 5% to $2bn.
"The Corporation could increase production substantially, adding hundreds of millions to monthly state revenue," NOC Chairman Mustafa Sanalla said. "But that will only happen if NOC’s budget is disbursed. If the corporation’s allocations are not released without delay, Libyan oil production will be hundreds of thousands of barrels per day lower than it should be. That will have an extremely negative effect on national income."
He also said that the budget for NOC was around 40% lower than requested, and was subsequently lowered without the company's knowledge.
The $1bn will be deposited in what the government document called "an emergency account" which NOC could access as planned. The money will be taken from fees that have been in place since 2018 on sales of foreign exchange, Reuters reported.