Libya 's oil production is coming back online faster than expected and should reach 700,000 barrels a day by the end of the year, the country's interim Oil Minister Ali Tarhouni said Thursday, confirming estimates also announced by the International Energy Agency.

Tarhouni says he is optimistic about the rebounding Libyan energy sector as the country begins to move ahead after the eight-month revolution that ousted Moammar Gadhafi from office, but he offered a more mixed picture about the ability of the rest of the economy to recover from the shocks of the war and the recent political changes.

Libya 's interim prime minister is conducting stiff negotiations with the rest of the rebel-run National Transitional Council about the makeup of a new government to run the country for the expected eight months before elections can be held.

The political limbo has put heavy pressure on Libya 's currency, the dinar, which has lost 9% of its value against the U.S. dollar in the last two weeks. This fluctuation as well as uncertainty about new post-Gadhafi legal landscape are major reasons cited by Libya 's private-sector businessmen for their hesitation to make fresh investment plans and export orders.

While the oil sector dominates Libya's economy, local and foreign businesses are hoping that a more open and transparent government will make it easier to work in the Libyan market, especially the infrastructure sector, health care and education-areas that the interim authorities have said will be of priority interest for spending next year.

But Tarhouni cautioned that the pace of Libya 's reconstruction will be slower than the private sector is hoping, saying it was unlikely that the unelected Libyan authorities leading the country now will award major reconstruction contracts until a more representative government comes to office. Elections are expected to be held around August next year.

"I don't anticipate that the transitional government will make any big infrastructure decisions until elections," he said. Tarhouni also said that Libya won't offer new oil concessions during the eight-month tenure of the incoming government.

The minister also conceded that the oil and gas sectors will remain the driver of economic development and growth for the foreseeable future. He said the bright spot of the economy was the quicker-than-expected return to pre-revolution oil production levels. Currently, Libya is pumping 570,000 barrels a day, and he expects the rate to return to pre-war levels by June.

He also said that Libyan natural gas exports from the port of Melita would restart "any day now." Gas supplies from that terminal go to the Italian market.

The International Energy Agency, earlier in the day, confirmed the oil production estimates announced by Tarhouni at a Tripoli press conference. As recently as September, the IEA was predicting Libya would produce no more than 400,000 barrels a day by the end of this year. That milestone was passed in October, the IEA said.

Many constraints remain before Libya can restore full pre-war oil production of around 1.5 million barrels a day, the IEA said. Damage caused by heavy fighting around oil export terminals during the civil war is likely to constrain output even if oil fields themselves have not been damaged, it said.

It is unclear whether Tarhouni, a former economics professor at the University of Washington in Seattle , will retain his position in the new government, which expected to be formed in the next two weeks. The economic challenges facing that government will be huge, with some of the most pressing issues being the formation and budget for a new national army, plus the thorny issue of how to trim government payrolls and support the private sector.

Libya 's business community is lobbying the new interim government to loosen up many of the heavy-handed state policies that crimped corporate work during the Gadhafi regime, including foreign-currency exchange limits and a law that forced private enterprises to make Libyan employees shareholders of the business.

"My advice to them is to help support a free market. The free market will give us enough help to make the economy and our businesses healthy," said Mohammed Raied, the chairman of Libya 's largest dairy producer, Al-Naseem Ice-Cream and Dairy Products. It is unclear when the transitional government will tackle these legal issues over its eight-month tenure or not.

Libyan businessmen also say that they are having a hard time re-opening their lines of credit to kick start imports of goods and services due to the fact that many countries haven't yet unfrozen Libya's sovereign assets and central-bank reserves that were placed under sanction soon after the revolt against Gadhafi began in February. There is a policy dispute among Libya 's economic chiefs about the wisdom of unfreezing those funds.

In an interview earlier in the week, the central bank chief, Saddek Elkaber, urged the international community to move quickly to free up the country's foreign reserves in order to ease a liquidity crunch in the country.

However, Tarhouni and many officials in the Ministry of Finance are recommending a more cautious approach, in part to prevent corruption or mismanagement of the nation's wealth. "We don't yet have the capacity to monitor these funds," he said.

Διαβάστε ακόμα