Libya's National Oil Corporation (NOC) has agreed with the German oil firm, Wintershall, on an interim deal to resume oil production, a step forward to resolve a contract dispute that has been blocking almost 160.000 barrels per day (bpd) of oil output, according to a statement by the NOC.
"The agreement with Wintershall would allow an immediate resumption of production at Wintershall's concession areas in eastern Libya, where work was suspended due to an administrative dispute after the Presidential Council had decided to split the authorities of the NOC and the oil ministry with the NOC, keeping for itself the administration of oil investments." The NOC said on Tuesday.
The NOC added that it is targeting an increase in oil output to one million bpd by next July after the resumption of production in Wintershall's oilfields and elsewhere across Libya.
"The interim agreement gives Wintershall an amount of production sufficient to cover its costs, with all remaining production being allocated to NOC, and the two parties will attempt to resolve their dispute regarding the legal framework governing the oil operations."
On May 17 2017, the NOC Chairman, Mustafa Sanallah, accused Wintershall of deducting over 900 million dollars from Libya's oil revenue as well as of collaborating with the UN-proposed government to grip the profitable oil contracts in Libya.
Wintershall owns two concession areas in eastern Sirte (NC 96 and NC 97) as per a contract signed in 1966. In 1996, the production rates of the two areas reached about 100.000 bpd.