Libya in dire economic straits as oil revenues plummet

Libya has lost over $68bn worth of oil revenues recently due to power struggles among rival factions, which has decimated its economy; 75 oil fields have shut down as spiralling violence plagues the country's primary export. Chairman of National Oil Corp, Mustoafa Sanalla, says "the economy is in a very critical situation". The Economist Intelligence Unit estimates that Libya will have the world's fastest-shrinking economy in 2016, ahead of Syria and Venezuela. At the same time, ISIS has established a base in the country due to the power vacuum within it, with up to 30,000 fighters now controlling parts of Derna and Sirte.

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Libya’s chairman of the NOC (National Oil Corporation) has claimed more than $53billion of lost revenue from the energy industry has been caused by the country’s Petroleum Facilities Guard (PFG).

Figures show the country, which is battling between two different factions for power, has lost more than $68billion since 2013.

According to reports in the Financial Times, NOC chairman Mustafa Sanalla said the PFG, which is meant to protect Libya’s energy infrastructure, has been its biggest hindrance.

He said an oil tanker had been sent to drain storage facilities at the Libyan port of Ras Lanuf in a preventative measure against ISIS (Islamic State).

However, the PFG did not grant permission for the move, and later on in the same week, the stored crude was set on fire.

Sanalla said: “I am very angry. We could have stopped this latest attack by the cancer than is Isis.

“The economy is in a very critical situation. Relations between the two governments are really very bad and it has crippled the industry.”

There have been 75 separate oilfield shutdowns and port disruptions that have restricted output since 2013.

Libya has also been challenged in what it has been able to export, which has brought in less revenue.

The Economist Intelligence Unit has also estimated Libya will have the world’s fastest shrinking economy in 2016 leading ahead of Syria, Venezuela and Equatorial Guinea.