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Libya Needs $25 Billion to Boost Crude Output, Challenger Says

Aug. 26 (Bloomberg) -- Libya’s oil industry will need at least $25 billion in investment to increase its oil production to 2 million barrels a day, the chairman of drilling-rig operator Challenger Ltd. said.

“Fields need to be developed, others redeveloped,” Hassan Tatanaki said in a telephone interview today. “The Libyan oil industry needs a lot of revamping. We have to reinvest to be able to get the proper cost effective amount into the industry in terms of the country’s production level.”

The armed conflict in Libya, holder of Africa’s largest proven reserves, has reduced the nation’s output to 100,000 barrels a day in July from the 1.6 million barrels pumped before the uprising started in February. A full recovery of production may take as long as three years, according to analyst estimates.

Tatanaki, 53, said he intends to play a role in rebuilding Libya’s oil industry, of which Challenger’s 35 rigs across the country “are the core.” His Libya El Hurra charity, set up shortly after the unrest began, has been providing humanitarian aid and relief to refugees and those displaced by the conflict in Libya operating out of Egypt, Tunisia, Libya and the U.S.

“We’re not just concentrating on just medical and food supplies,” Tatanaki said. “We also want to play a part in other ways so that in the next year or so we have a proper constitution, transparency that helps create a democracy.”

Forces loyal to Muammar Qaddafi continued to battle rebels in the Libyan capital, Tripoli, as the opposition National Transitional Council said the North African nation’s humanitarian aid needs are “urgent.”

Rebel leaders worked to retrieve assets frozen by the United Nations and individual countries in an effort to obtain funding for food, and humanitarian and medical needs, transitional council Chairman Mustafa Abdel Jalil said at a press conference in Benghazi yesterday. Since fighting began in Libya, the number of people killed has “exceeded 20,000,” Abdel Jalil said yesterday.

To contact the reporter on this story: Massoud A. Derhally in Beirut at mderhally@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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