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Wednesday, August 10, 2016

Libyan National Oil Company hopes to boost oil production

The National Oil Company (NOC) welcomed the announcement of the Presidency Council (PC) of the unconditional opening of several eastern oil ports by the Petroleum Facilities Guards (PFG), led by Ibrahim Jadhran.

The oil ports to re-open are Ras Lanauf, Es Sidre, and Zuetina. The NOC also said it was "announcing a new initiative to end the use of oil blockades as a political tool."
The NOC also revealed that in a phone call with its chairman Mustafa Sanalla, Musa Koni, the Vice-President of the PC claimed that the PC "had not paid the Petroleum Facilities Guard to open the ports. The only money paid to the PFG was for overdue salaries." Even if this is true, and we cannot be sure since the agreement details have not been released, some critics claim that the number of employees working for the PFG is greatly inflated. It is unlikely that Jadhran would agree to re-open the ports unless he were given some monetary incentive to do so.
After the deal was reached with Jadhran in Ras Lanauf with the help of the Special Representative of the Secretary-General SRSG), Martin Kobler, Sanalla had written a blistering letter to him criticizing the deal and virtually calling Jadhran a deceiver and crook. Jadhran fired back calling Mustafa's letter worthless. Jadhran appears to have won. It is now as if no dispute ever existed. Sanalla said:“I am pleased the Presidency Council agrees that we cannot reward individuals who hold Libya’s oil hostage.There can be no back room deals if we are to build trust. I call now on other groups that are using the blockade as a tactic to let Libya’s oil flow freely. In the West of Libya, 400,000 b/d of production is shut in at the Sharara and El-Feel fields”.
Sanalla claimed that it now appears that the PFG has understood the costs of a blockade are not only to the nation but to the blockaders themselves and that a blockade does not benefit anyone. At the very least, the blockade ensured that the PFG has their back salary demands met. Other blockaders, Sanalla claimed, must also understand that blockades do not benefit anyone. Of course they do, if the government gives in to the demands of the blockaders, to ensure that there are oil exports.
There is no mention of the fact that the agreement between the rival NOC's one in the east and the other in the west to merge, seems not yet to have been ratified by the HoR which has demanded changes to the agreement. Nor is there any mention of the fact that important groups have not given up on being part of any agreement before oil is allowed to flow. The tribes and their Council who control oil fields feeding into the oil crescent oil ports demand the NOC negotiate with them and have the approval of the HoR government. The Libyan National Army is demanding that any tankers intending to export oil should have a permit from the eastern-based NOC. The joint NOC is not even mentioned.
Sanalla welcomed the PC decision to budget money to the NOC to raise production, claiming it will enable the NOC to boost production up to 900,000 barrels per day by the end of this year. Sanalla said:“Now we will begin working with the Presidency Council and the Energy Committee of the House or Representatives to restart exports from the ports that were closed and from the fields that supply them. We need to be clear there are still big military, political and legal obstacles that must be resolved”, he warned...In the spirit of national unity, we urge the tribes and the municipalities in the oil-producing areas all over Libya to cooperate and join our commitment to let Libya’s oil flow freely. Libyan oil is for all Libyans”.
Notice that Sanalla contemplates working with a committee of the HoR. The NOC is in effect recognizing a government other than the PC and GNA. The UN warns against anyone working with parallel institutions rather than the GNA but this does not seem to apply to institutions of the GNA themselves.
Jadhran said that the terminals could be working again within a few days. This must surely be on a very limited basis as Es Sidre and Ras Lanauf tank farms and infrastructure have been severely damaged first by former Salvation government's Libya Dawn forces in February 2015 and later by the Islamic State.


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