(Ecofin Agency) - Libya’s National Oil Corporation Chairman, Mustafa Sanalla (photo), has announced that the delays in the passing of budget from the new government is affecting oil production, making the country lose about 200,000 barrels per day at the cost of millions of dollars.

According to Sanalla, NOC’s calculations have showed that the lack of budget has resulted in production losses at its AGOCO and Sirte Oil fields of about 35 million barrels or 229,000 bpd since the government's presidential council assumed office in March.

He said the government's financial arrangements committee should come out and give details about the delays in the budget that had cost an estimated $1.56 billion in losses to date.

“Let me make one thing very clear: blocking payments to NOC is harming the Libyan people. The money is there. The treasury would recover its investment in two to three months, as well as almost double its income. Having no regular oil production and shutting down key oil fields will definitely cost us an arm and a leg in the oil sector as we will move heaven and earth to regain the loss of production, but all will turn to be in vain, as the changes done in those fields will lead to loss of crude oil for good,” he said.

Sanalla added that the NOC is in charge of discovering, producing, refining, selling and transporting the crude oil and oil products in the country, yet the incomes go to the Central Bank of Libya, while the dealings of the oil industry are paid for by Libya’s general treasury.

Libya’s production dropped to below 300,000 barrels per day as a result of fights, strikes and attacks between two rival governments since 2014 and Islamic State militants which have also attacked fields and oil terminals.

In an effort to resolve those divisions, a new national unity government backed by the United Nations assumed office since March but has been hindered by political infighting and opposition from extremists who reject its authority.

In July, NOC announced plans to boost production by 150,000 barrels per day within two weeks following an agreement to reopen two major oil terminals. It added that it intends to slowly increase output to 900,000 bpd by the end of this year, Reuters reports.

Anita Fatunji