Chair of Libyan National Oil Company complains of attempts to sell oill illegally

Chairman of the Tripoli-based Libyan National Oil Corporation (NOC) Mustafa Sanalla spoke out against a new attempt he claimed was being made to sell oil outside the monopoly of the NOC.

The NOC put out a statement saying it knows of illegal offers to sell oil at a large discount to official selling prices. The NOC said that if they succeeded Libya would be out hundreds of millions of dollars in lost revenue. The statement gave no details as to who was offering the contract but warned shipping companies such contracts were illegal. The NOC statement cautioned about the contracts: “Entering into them may lead to serious legal consequences and financial losses. NOC does not accept responsibly or liability whatsoever for any loss or damage incurred as the result of entering into contracts with unauthorised individuals.”

The NOC claims that it has contracts with 16 international companies covering the sale of all Libyan oil to be produced this year. The NOC said that only those 16 companies are contracted to buy Liyban oil and charter shipping tankers from Libyan ports for 2017. The companies are: ENI, Total, OMV, Repsol, Rosneft, LukOil, Cepsa, Saras, API, Glencore, Socar, Unipec, Vitol, Gunvor, Petraco, and BB Energy. NOC said that all crude oil exports were paid for by documentary letters of credit and at the official selling price with no discounts.

This would not be the first time that there were attempts to sell oil outside the monopoly of the NOC. In March of 2014 Ibrahim Jadhran's forces in the east tried to ship oil from Es Sidra using the North Korean flagged ship Morning Glory. The ship was eventually seized by US marines and returned to the Tripoli-based government. In April of 2016, the parallel eastern branch of the NOC tried to sell 650,000 barrels to a UAE buyer. The Indian tanker Distya Ameya loaded the oil at Tobruk but was refused entry into Malta. The UN meanwhile sanctioned the ship and it was unable to unload anywhere. It eventually sailed to Zawia in western Libya and unloaded its cargo.

After eastern commander Field Marshall Khalifa Haftar, captured the four ports of the Libyan Oil Crescent last September, he turned over control of the terminals to the NOC and allowed exports. No doubt he decided that it was better for him to cooperate with the NOC in Tripoli rather than attempt to export through the rival eastern NOC even though he does not recognize the UN-brokered Government of National Accord (GNA). Two of the ports were briefly retaken by the Benghazi Defense Brigades but were recaptured by Haftar later. The House of Representatives(HoR) based in Tobruk had urged Haftar to turn over the two ports as soon as he had procured them but did not say to whom. Haftar's Libyan National Army(LNA) had allowed continued oil export from the four ports even though the NOC unification has been stalled. A recent article suggests: "The parliament statement, coupled with the withdrawal of the NOC Benghazi head from the unification deal, appeared to signal that eastern-based factions may try to leverage their military control over the ports and other oil facilities." However a tanker is already loading oil at El Sidra port one of the two recaptured ports so it appears that for now Haftar is continuing with the previous arrangement.

In another development the Presidential Council has taken over most of the powers of the Oil Ministry. The PC will sign off on all projects to boost production, and approve all exploration-production agreements. It will control pricing of oil, gas, and derivatives and oversee the security and protection of all oil resources. It will also control any private investment in the oil sector and approve the National Oil Co. (NOC) budget.

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