Thursday, September 22, 2016

Libyan state oil company releases positive statement after seizure of oil wells by General Haftar

The seizure of the four oil export ports in the Libyan Oil Crescent has resulted in a positive statement from the Tripoli-based National Oil Corporation in contrast to the response of the UN which complained it could hinder expansion of exports.

The Tripoli-based National Oil Company(NOC) said that it would begin work immediately to restart exports from Oil Crescent ports. NOC chair Mustafa Sanalla said:
“We welcome statements from the Libyan National Army allied with House of Representatives and the president of the HoR, Aguila Saleh, that the ports should be placed under NOC’s control, our technical teams already started assessing what needs to be done to lift force majeure and restart exports as soon as possible. As Libyans we have a common interest in keeping our oil flowing. By raising oil production and exports we can reduce our budget deficit and pay for vital services.”
There are actually two NOC's one based in Tripoli and associated with the UN-backed Government of National Accord (GNA) and the other in Bayda associated with the Al-Thinni government of the House of Reprersentatives (HoR). These two were supposedly merged in an agreement in July but the HoR rejected the agreement: Speaking to Dignity Operation's Alhadat TV last Monday, Al-Thanni said the agreement will not be accepted until certain preconditions are met. Based on regional interest, Al-Thanni demanded that 40 percent in net oil revenues must be allocated to the eastern region and the remaining 60% goes to the western and southern regions.Operation Dignity was launched by Haftar back in May 2014 and is to a considerable extent responsible for the present conflict with the GNA. There is no mention of this division in most analyses, including in reports by "experts". An excellent analysis of the situation in this article which argues that the port takeover could provide an opportunity to export more oil also does not mention the issue. Both Haftar and the Tripoli-based NOC speak just of the NOC. But which does Haftar mean?
Back in July Haftar and the HoR recognized only the Bayda NOC: "Abdulraziig al-Nadori, Chief of the General Staff of the House of Representatives, warned foreign ships not to enter Libyan territorial waters without a permit from the Bayda-based National Oil Company (NOC) or risk being targeted by air or ground forces." However there have been exports from Hariga port that is under the control of forces loyal tol Haftar according to this article. Sanalla appears to welcome the replacement of Jadhran whom he hated by Haftar as controller of the ports. Sanalla was outraged by the deal with Jadhran and is no doubt happy it was sabotaged by Haftar. However, Haftar does not accept the GNA but the HoR as the legitimate government. What is left out of all accounts of what is happening is that the NOC merger still needs to be finalized.
This will involve the GNA again dealing with parallel institutions this time the Bayda-based NOC. A tweet makes it clear that the merger still has to be finalized: "#Libya | Chairman of eastern NOC says he'll meet Tripoli NOC chairman next week to unite the two corporations & re-open oil ports." In other words the Bayda-based NOC now backed by Haftar who occupies the ports will be able to drive a hard bargain with the NOC if it wants to open the ports. You will find nothing of this in reports — at least those I have seen. The NOC statement said: "Under a unity agreement signed in July, ‎NOC recognizes the Presidency Council as the highest executive authority and the House of Representatives as the highest legislative authority. A central aim of the agreement is to ensure that Libya’s oil wealth is used for the benefit of all Libyans." Not a peep about the fact that the HoR never approved the unity agreement. Is this meant deliberately to mislead or is it incompetence? It is in Haftar's interest to seem to go along with the Tripoli-based NOC, but if the HoR does not achieve a deal that it approves, he will not hesitate to act.
A tweet says: "Khalifa Haftar: I will make sure the Army does not interfere w/ oil business,which is a civilian matter. Army complied w/ its national duty." He may very well keep his promise but he will let the HoR take care of the issue not the GNA. He will cooperate as long as he thinks the HoR managed to arrive at a good deal. Otherwise he may as part of his "patriotic duty" stop oil production and exports.
Maybe Haftar hopes things will not work out. This can provide a rationale for continuing on with Operation Dignity by defeating militias associated with the GNA. As a recent tweet explains: "Spokesperson of Dignity Operation Ahmed Mismari threatens to invade Tripoli, saying their troops are very close to Tripoli and Zawia." The UN and the GNA have shown themselves to be hopelessly weak. Haftar has successfully weakened them even further. Oil interests don't care what happens as long as they can have access to Libyan oil on reasonable terms for them. Haftar will become more and more attractive as an alternative to the LPA and the GNA. He can always be praised and promoted as a champion of the war on terrorism. All his opponents will become terrorists. Other leaders have made similar claims: Gadaffi, Assad, El-Sisi.

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