Friday, August 5, 2016

Head of Libyan National Oil Company condemns deal to open oil ports

- An agreement between UN envoy to Libya Martin Kobler and Ibrahim Jodhran, head of the Petroleum Facilities Guard (PFG), has been denounced by the chair of the National Oil Company (NOC), Mustafa Sanalla.

Last Thursday, Kobler, Special Representative of the Secretary-General, met with Jodhran. As the Libyan Herald reported: "Kobler appeared overjoyed to meet the controversial PFG leader whose regular closure of export terminals from 2013 onwards cruelly demonstrated the powerlessness of the-then Ali Zeidan government in Tripoli." In spite of losing several billion dollars in export revenue by his extended closing of the ports in order to get a better deal from the government, Jodhran's support of the GNA and pledge to help export more oil has been welcomed by Kobler. Kobler, the GNA, and international oil companies are anxious that Libya increase its production and export of oil. Jodhran is an opponent of General Khalifa Haftar who opposes the GNA and supports the HoR and the Al-Thinni government. The agreement details were not released but are said to have included salaries for the guards.
In a letter to Kobler, a copy of which was obtained by the Libya Herald, Sanalla said he was dismayed at Kobler's meeting with Jadhran, whom he claimed had cost Libya "over $100 billion in lost revenues."He lashed out at Kobler: ‘’For you to associate yourself and the United Nations with one of most despised individuals in the country will severely tarnish your reputation, and that of the United Nations. Your job in future will not be made easier by this step’’. He also said that recognition of Jadhran set a bad precedent in that everyone who can muster a militia will be encouraged to shut down a pipeline, an oilfield or port to see what they can extort. This ignores the fact that Libya already faces the situation that Sanalla describes.
Sanalla complains that Jodhran was malevolent and was only motivated by what was good for Jathran. This description probably applies just as well to other stakeholders in the Libya oil patch. After the Kobler agreement, the tribes associated with the oil fields that feed into Jodhran's ports of Ras Lanauf and Es Sidre, noted that the agreement did not represent them and their agreement was needed. They, just as Jodhran, want their cut of the oil revenues. The tribes and their Council support the rival HoR government rather than the GNA.
The tribal objections were underlined by statements from the Commander of the Marada Operations Room who said that they will not allow crude oil to be pumped to the ports which are under the control of armed guards headed by Jodhran. The commander said the oil fields were under control of the HoR and its commander in chief Khalifa Haftar.
That a UN official should make a deal with Jodhran rather than the GNA through the NOC is astonishing in the first place. That Kobler should also ignore the fact that the fields which supply the ports are held by those who do not even recognize the GNA is even more astonishing. The obvious anger evident in the NOC chair's letter is not in the least bit surprising.
Sanilla warned that in order to avoid legal claims it would not lift force majeure, and that if UNSMIL or the GNA supported Jadhran they could be liable in courts. The entire letter to Kobler can be found here.
Sanilla even threatened that the NOC might refuse to recognize the Presidency Council if events kept on as they have been.
Sanilla makes no mention of the recent agreement to merge the two rival NOCs one based in Tobruk and the other in Tripoli. The HoR government has rejected the deal and will not accept it until certain demands are met including agreement on the division of revenues. There seems to be little in the press as to what if anything has happened in terms of getting the agreement of the HoR to the merger. This is just one more problem to be solved before Libya can hope to improve its oil production and exportation to any significant degree.



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