“The NOC (National Oil Corporation) is one of the few functioning national institutions that has worked across a complex political divide including Serraj and the forces of Field-Marshal General Haftar, the leader of the self-styled Libyan National Army in the East”.
A power struggle for control of Libya’s oil threatens to deepen splits in the country and undermine the fragile authority of the UN-backed Libyan Government of National Accord, (GNA). The battle has forced the politically neutral chairman of the Libyan National Oil Corporation (NOC) to warn the GNA that it has overstepped its authority both by closing the Oil Ministry and by trying to take over some of the NOC’s role. The attack by Libyan oil boss Mustafa Sanalla may weaken already fraying international support for the Tripoli-based GNA led by Fayed Al Serraj. In a deeply divided country, Sanalla is one of the few public figures respected by all sides. Ambassadors from the five permanent members of the UN Security Council sided with Sanalla, stressing that “the petroleum infrastructure, production and export revenues belong to all the Libyan people and must remain under the stewardship of the NOC”. An apolitical functioning national body for Libya’s vast oil revenues is critical to preventing the breakup of the country. Production has been increased from 700,000 barrels per day from 200,000 bpd, but is now slipping due to the renewed unrest, and in particular the closure of the pipeline from Sharara, Libya’s biggest field, in Western Libya. Pipelines are regularly shut as militias bargain for advantage. Sharara, run by Spain’s Repsol SA, produces 221,000 barrels per day. It came back on stream in December after the pipeline had been shut for two years. Sanalla persuaded the group blocking it to desist in return for economic aid to the region. Before the 2011 war, Libya produced 1.6m barrels per day and had more than $100bn in reserves. Sanalla has been slowly increasing Libyan oil production, and persuading foreign oil companies from Russia, Italy and the UK to trust that the security situation will improve. The NOC is one of the few functioning national institutions that has worked across a complex political divide including Serraj and the forces of Field-Marshal General Haftar, leader of the Libyan National Army in the East. Western governments have acknowledged that Haftar, backed by Egypt and Russia, must be given a prominent position in a reconstituted Government of national unity, but believe he wants to be a military dictator.
Mattia Toaldo (European Council on Foreign Relations): “Russia’s increasing political backing and the anti-Islamist winds blowing in Washington have strengthened Haftar’s belief there is no point negotiating a political solution with the forces in Western Libya.”