Libya Negotiating for Two Refineries

Libya's official government is in talks with British Virgin Islands-based Pavilion Recovered Oil to build two small refineries, one in the east and the other in the south of the oil producer, it said on Tuesday.

The refineries would each have a production capacity of 6,000 barrels per day (bpd), a government spokesman said.

Premier Abdullah al-Thinni met officials of the oil services company at his government seat in eastern Libya to discuss contracting the project, a cabinet statement said, showing pictures of the meeting.

It was unclear how the government would finance the project as development funds have been frozen by the central bank which is trying to limit spending due to a dive in oil revenues.

Thinni has been based in the east since losing control of the capital Tripoli, seized by an armed group in August which set up an alternative administration.

The central bank is paying out only public salaries and subsidies. It used up a quarter of its foreign currency reserves in 2014 due to a loss of oil revenues.

Libya has two main refineries, the 120,000-bpd Zawiya refinery supplying western Libya. In the east there is just the 20,000-bpd Tobruk refinery working apart from a small refinery in Sarir in the remote south.

Fuel products, especially for the east, are imported, leading often to shortages if bad weather, protests or fighting closes oil ports.

Reporting by Feras Bosalum