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The National Oil Corporation of Libya and Russia’s Rosneft have signed a preliminary agreement for cooperation on crude exploration and production as the struggling north African nation seeks to boost output.
An accord was signed in London by NOC chairman Mustafa Sanalla and Rosneft chairman Igor Sechin on the sidelines of the International Petroleum Week conference.
The announcement on Tuesday comes a month after Mr Sanalla told the FT he was pushing for investment from international oil companies, to revive the energy sector that has been battered after years of civil war and unrest.
Mr Sanalla is targeting expansion of Libya’s oil production to 2.1m b/d by 2022.
Libya NOC and Rosneft also signed a crude oil offtake agreement.
“We need the assistance and investment of major international oil companies to reach our production goals and stabilise our economy,” said Mr Sanalla. “This agreement with Russia’s largest oil company lays the foundations for us jointly to identify areas of cooperation.”
Before the 2011 revolution Libya’s output – the mainstay of the country’s economy – was above 1.6m b/d. It then collapsed to a fraction of this level as conflict took hold. Over the past two years the collapse in the oil price and the onslaught of Isis militants have provided further obstacles.
The reopening of three major ports and a pipeline over the past few months has given Libya reason to be optimistic, with production recovering to around 700,000 b/d. The NOC hopes output will rise to 1.2m b/d by the end of the year if it can secure enough investment.