Libya’s National Oil Corporation (NOC) has signed a crude oil offtake agreement with Russia’s Rosneft as it looks to encourage foreign investment and bolster Libyan output, the NOC said on Tuesday.
The NOC and Rosneft also signed a cooperation framework agreement which the NOC said “lays the groundwork for investment by Rosneft in Libya’s oil sector”.
“The agreement envisages the establishment of a joint working committee of the two partners to evaluate opportunities in a variety of sectors, including exploration and production,” the NOC said in a statement.
The NOC gave no details on the offtake deal.
Libya has more than doubled its oil production to 700,000 barrels per day (bpd) in recent months, though output remains well below the more than 1.6 million bpd it was pumping before Libya’s 2011 uprising.
Production gains are dependent on investment and repairs to infrastructure, and vulnerable to continuing conflict, with Libya split between political factions based in Tripoli and the east.
Russia has been showing growing support for eastern-based military commander Khalifa Haftar.
His forces control most of Libya’s oil resources, and have recently been cooperating with the Tripoli-based NOC despite earlier attempts by eastern factions to sell oil independently.
Commodities trader Glencore, which is a shareholder in Rosneft and a trading partner for the Russian firm, has long backed the NOC in Tripoli, and recently extended a deal entitling it to market about one third of Libya’s current output.
The NOC seeks to boost output to 1.2 million bpd this year, and to 2.1 million bpd by 2020.
Libya is one of two OPEC members exempted from recent production cuts as it seeks to recover from years of conflict.
“We need the assistance and investment of major international oil companies to reach our production goals and stabilise our economy,” NOC Chairman Mustafa Sanalla said in Tuesday’s statement.
“Working with NOC, Rosneft and Russia can play an important and constructive role in Libya.”
The deal with NOC was announced as Rosneft said it had signed a deal to pre-finance crude exports from Kurdistan, becoming the first major oil firm to make such an agreement with the semi-autonomous Iraqi region.