Libya's NOC handed back control of eastern terminals

The National Oil Corporation's board commended Haftar and his forces "for putting the national interest first.”
Sunday 15/07/2018
A Libyan soldier walks next to damaged tanks and pipelines at the oil port of Ras Lanuf, Libya July 10, 2018. (Reuters)
A Libyan soldier walks next to damaged tanks and pipelines at the oil port of Ras Lanuf, Libya July 10, 2018. (Reuters)

Libya is resuming oil exports from its eastern production heartland, its National Oil Corporation (NOC) said Wednesday after a showdown between the war-torn country’s rival authorities.

The internationally recognised NOC was handed back control of four terminals in the oil crescent on Wednesday morning, it said in a statement, adding that “production and export operations will return to normal levels within the next few hours”.

The disruption had underscored the continued turmoil in Libya, which has been wracked by chaos since the 2011 NATO-backed uprising that toppled and killed long-time dictator Muammar Qaddafi, with two rival authorities vying for control.

Exports from all four of the eastern ports had been suspended after military strongman Khalifa Haftar’s self-styled Libyan National Army (LNA) regained full control of the region from a rival militia in June.

The move added to supply worries on world markets at a time of rising crude oil prices.

The NOC had declared force majeure on oil loadings at the ports, a legal measure that frees parties to a contract from their obligations due to circumstances beyond their control.

But on Wednesday it announced “the lifting of force majeure” at the Al-Hariga, Zweitina, Ras Lanuf and Al-Sidra ports, which are conduits for much of the crude, gas and petrochemical sales that form the lifeblood of Libya’s economy.

The NOC said in early July that the crisis had slashed crude production by over four fifths and cut the country’s heavily oil-dependent public revenues by some $67.4 million (57.9 million euro) per day.

Haftar’s LNA recaptured Ras Lanuf and Al-Sidra in June after they were attacked and briefly seized by armed groups led by militia leader Ibrahim Jadhran, who had controlled them from 2011 to 2016.

Haftar’s forces said they would hand the installations and their revenues to an eastern administration that rivals the United Nations-backed Government of National Accord (GNA) in the capital.

But the GNA urged the UN to block any “illegal” oil exports, and the NOC in Tripoli said it was the “only recognised Libyan entity” responsible for oil production and exports.

The clashes had forced the NOC to suspend operations at Ras Lanuf and Al-Sidra in mid-June, and early this month it declared force majeure on the ports of Zweitina and Al-Hariga after accusing the LNA of imposing a blockade.

But it said Wednesday the facilities had been handed back to its control, and added that its board “commended (Haftar’s forces) for putting the national interest first.”

‘Heart of crisis’ 

Libya produced 1.6 million barrels per day (bpd) of oil before Qaddafi's ouster in February 2011. Production fell by about 20 percent after the revolution, before recovering to one million bpd by the end of 2017.

The NOC, under a UN resolution, has been in charge of managing the oil crescent and export revenues, even though Haftar’s LNA seized control of the region in 2016.

The revenues are transferred to the GNA-affiliated central bank which is tasked with distributing the funds to “all regions and administrations”, including zones under the control of the eastern authorities.

According to sources close to the administration in eastern Libya, it aimed to win political concessions from the GNA, notably to dismiss the bank’s governor, Seddik al-Kebir, accused of financing rival forces.

In the NOC’s statement Wednesday, chairman Mustafa Sanallah urged the Central Bank and Ministry of Finance to publish their budgets and called for “a proper national debate on the fair distribution of oil revenues”.

“It is at the heart of the recent crisis,” he said.

“The real solution is transparency… Libyan citizens should be able to see how every (penny) of their oil wealth is spent.”

(Agence France-Presse)