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Libya’s Sanallah calls for external help

The NOC chief wants assistance to get the country exporting oil again

Libya’s oil chief Mustafa Sanallah is calling for Western powers to intervene to end a blockade of oil ports by eastern general Khalifa Haftar that has cost $560mn in lost export revenue. But his appeal has been met with silence, with division between various stakeholders. 

Haftar’s Libyan National Army (LNA) ordered the shutdown of five ports serving the Sirte Basin, home to two thirds of production, on 17 January, and pro-Haftar forces closed key south-western oil fields, Sharara and El Feel, two days later. 

Sanallah, chairman of the National Oil Corporation (NOC), says production, which had averaged 1.1mn bl/d, will fall to 72,000bl/d by early February. 

Haftar ordered the shutdown in protest at the arrival of Turkish-backed Syrian mercenaries to fight alongside forces of Tripoli’s Government of National Accord (GNA) in a civil war now in its sixth year. 

After meeting British officials in London, Mr Sanallah told journalists at Chatham House, a think-tank, that only international pressure could end the shutdown. “We are asking other powers to fix this, powers like the UK, like the US, like France. When they want to stop something, they can stop it.” 

The shutdown was bloodless, coming through a series of phone calls from the LNA to port managers. “The LNA called and said no more deliveries,” says Sanallah. “The war in Libya is about oil, I have said it many times.”  

Late last year, on the back of rising production, Sanallah announced plans to push output to 2.4mn bl/d by 2024

Haftar commands forces of the Tobruk government, a rival to the GNA, and successful offensives in recent years have seen him capture most of the country and all significant oil fields, with his army now battling to capture Tripoli. Sanallah says that, as soon as storage tanks fill, Sirte Basin fields will go offline and production will be limited to 60,000bl/d from the offshore Bouri and Al Jurf fields, along with 12,000bl/d from the western Wafa gas field. 

An added problem is that most storage tanks in the biggest oil port, Sidra, and nearby Ras Lanuf have been destroyed in previous fighting, leaving their capacity at 37pc and 30pc respectively. 

The shutdown is a bitter blow to the NOC. Late last year, on the back of rising production, Sanallah announced plans to push output to 2.4mn bl/d by 2024. Exploration had also resumed, with Tatneft, Russia’s sixth largest oil company, recently completing seismic surveys in concessions in west Libya. 

Proxy war

Haftar previously closed the ports in June 2018, after they were attacked by forces allied to the GNA. On that occasion he was persuaded to relent by the Trump administration, which worried lost production would push up oil prices. Washington has no such concerns now, with prices low and global demand sagging, and Trump last year signalled support for Haftar with an appreciative phone call. 

Other external actors are meanwhile split, with Libya a proxy war waged by a wider Middle East rivalry: Egypt, Saudi Arabia and the UAE back Haftar, while Turkey and Qatar support Tripoli. Added to this, France and Russia back Haftar and Italy Tripoli. 

Libya’s conflict has also become ensnared in an escalating rivalry over vast gas reserves in the East Mediterranean, pitting Turkey against Cyprus, Israel and Egypt. In November, Turkey signed a controversial treaty with the Tripoli government under which each has laid claim to a stretch of 200 miles of the Mediterranean for gas exploration, the two territorial claims meeting in the middle. The claim, opposed by Greece, is in part to block an, albeit ambitious, pipeline Cyprus and Israel want to construct to get their gas to Europe.  

Enter Turkey

In return for the treaty, Turkey deployed troops to Tripoli, along with the Syrian mercenaries, with Ankara claiming this is to counter Russian mercenaries attached to Haftar’s forces. 

French president Emmanuel Macron this week accused Turkey of breaking promises made at a Libya conference in Berlin that foreign forces would be withdrawn, while Turkey’s foreign ministry said France, whose special forces have aided Haftar, is “the main actor” in Libyan instability. 

The NOC’s last line of defence are a series of UN Security Council resolutions mandating that only the NOC can sell Libyan oil, and, so far, Tobruk has failed to sell eastern oil independently. Oil revenues pass to the GNA, by dint of its status as the recognised government. 

Libya’s dwindling band of optimists hope that with Tobruk controlling the oil, but unable to sell it, the shutdown can be ended if Tripoli gives Tobruk a larger share of the oil take. 

However, with Turkish troops in Tripoli dampening Haftar’s hopes of capturing the city, separatists in east Libya argue that a formal split in Libya is the only answer to securing its share of the oil revenues. Such a split would worsen the civil war and likely see the collapse of the NOC.

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