NEW YORK (Oil Price) - The Arabian Gulf Oil Company, a subsidiary of Libya’s National Oil Corporation (NOC), has suspended oil production for lack of money, Arab News has reported, citing the company’s Facebook page.
AGOCO warned late on Thursday that it would stop oil-producing operations unless it gets its share of the budget allocations for last year and this year.
This is not the first time AGOCO stops pumping oil. In April, the company decided to halt production because of the delays in the budget which is planned to allocate money to the oil firm to repair and maintain infrastructure, and keep oil production online.
AGOCO is the operator of the oilfields Sarir, Mesla, al-Bayda, Nafoora, and Hamada, which, combined, can pump 300,000 barrels per day (bpd).
After AGOCO stopped production, NOC declared force majeure on the port of Hariga due to lack of funds for infrastructure repairs, pushing the country’s crude oil production below 1 million bpd for the first time in months as NOC was forced to suspend production at several fields. The company blamed the shortage of funds on Libya’s central bank.
A week later, NOC said it had lifted the force majeure on loadings from the Hariga oil terminal after reaching an agreement with the new unity government over the allocation of funds.
Currently, the North African oil producer exempted from the OPEC+ cuts pumps around 1.2 million bpd. According to secondary sources in OPEC’s latest Monthly Oil Market Report, Libya’s crude oil production averaged 1.165 million bpd in July, up from 1.163 million bpd in June.