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NOC’s Sanallah: ports deal with ‘criminal’ Jadhran threatens Libyan oil recovery

The UN’s agreement to pay off militia controlling oil terminals will ‘contaminate’ its reputation in the country and sets a dangerous precedent, says NOC chief

The deal brokered by the UN’s top diplomat in Libya, Martin Kobler, with Ibrahim Jadhran’s Petroleum Facilities Guards (PFG) is a threat to the oil sector and will damage the UN’s reputation in the country, Mustafa Sanallah, chairman of National Oil Company (NOC), said on 10 August.

While NOC was making new efforts to restart fields and pipelines in Libya’s southwest, the agreement to pay Jadhran to open the Ras Lanuf, Es-Sider and Zueitina ports – which his militia has shut for months – could now prompt other groups to hold energy infrastructure hostage.

“Up to now people at the terminals have been no problem – but now who knows?” Sanallah said, referring to groups controlling the two ports of Mellitah and Zawiyah, in Libya’s northwest.

Those ports once exported oil supplied from the Sharara and Elephant fields, in Libya’s southwest – which are shut in because different rival militias hold the fields and the pipelines connecting them to the ports. But as efforts to resolve those disputes continued to make progress, Sanallah suggested the PFG deal could now prompt a shake-down from other groups in position to obstruct cargo liftings.

“I’m afraid, really. If they are going to reward these people, others will say hey! [We want this],” Sannallah said in an interview with Petroleum Economist on 10 August.

Jadhran has been paid more than $40m already, Sanallah said, and more money may follow, after Martin Kobler, head of the UN’s mission to Libya, met the PFG leader on 24 July.

Jadhran’s pledge to allow oil to flow from the ports will be tested in the coming days, said Sanallah, when a vessel arrives to load stored crude oil at Zueitina for shipping to the Zawiyah refinery in Libya’s west.

“Now we will see - will Jadhran agree to load the vessel? Many times he has broken his promises,” he added. “Last April he broke his promise. Last June he broke his promises. We will see.”

Sanallah previously condemned the Kobler-Jadhran agreement in a letter seen by Petroleum Economist on 24 July. But he deepened his criticism in his 10 August interview, saying Kobler had given recognition to a “criminal” and his actions would have repercussions for the country.

“The people in the revolution wanted democracy,” he said, referring to the 2011 uprising against Muammar Qadhafi. “They don’t want a tyrant controlling. But then the money goes to Jadhran and the others? You are creating another dictator, another corruption, another war.”

Kobler’s PFG deal perplexed many other Libyan oil watchers. Jadhran has repeatedly used his PFG militia to further an agenda that has veered from declarations of autonomy for eastern Libya, to an attempt to sell oil independently – thwarted by US Navy Seals in March 2014 – to his recent alliance with Misratan forces and backing for the Government of National Accord.

“Mr Kobler’s actions are wrong – it was a mistake,” said Sanallah. “He gave recognition to this person – no one in Libya likes him.” By sitting down with Jadhran, Kobler was “contaminating” the UN’s future in the country.

The PFG is now squaring up at Zueitina against forces from the Libyan National Army, which is allied to the House of Representatives in Tobruk. Sanallah called on both sides to avoid damaging any energy facilities in their battle for the port, echoing a statement from international powers on 10 August that expressed their worry about “tensions” around the facility.

Chris Stephen contributed to this report, from Tunis

**The full interview will appear in Petroleum Economist’s in-depth survey of Libya’s oil sector in the September 2016 issue of the magazine.

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