Libyan Oil Majors Merge

Two major Libyan oil companies have agreed to merge as part of an effort to support the country’s government.

Libyan Oil Majors Merge

Two major Libyan oil companies have agreed to merge as part of an effort to support the country’s government. Since the Arab Spring, Libya has struggled to find stability and restore its industry. The state nationalizes all oil production under the government, but after the dictator Moammar Gadhafi was executed, Libya’s oil firms have become rivals with one another. Many oil companies in the country have struggled to resume normal levels of production, and large amounts of infighting within Libya’s industries has disrupted oil production. Now two major oil companies are merging under one banner under the government.

For months, a major oil producing firm in eastern Libya attempted to push its oil products into international markets. However, National Oil, the country’s government-backed oil company with recognition from the UN, inhibited any attempts by the Eastern firm to push oil into the international marketplace. However, late last week, the Libyan government announced that these two companies will now merge into one in support of a unified government. Mustafa Sanallah, the chairperson of National Oil, and Naji Elbugrabi, the head of the eastern rival, have both agreed to the merger.

The combined company will be headquartered in Benghazi, one of the primary cities for oil demand in the east sector of Libya. The merged company will also report to the Presidential Council based in Libya’s capital Tripoli as part of an effort to unify the country’s oil production under one banner. Libya’s recovery relies on unifying the companies controlling the country’s vast oil resources, which appears to be currently underway. At one point, National Oil produced 70 percent of all Libyan oil production, and a solidified National Oil could help ramp up the country’s oil production, which has been cut but a fifth since the Arab Spring occurred.

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As of 23:44 BST, Tuesday, 05 July, Oil share price is $49.59.

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