Oil production and export in Libya may increase only slowly

Recently the two rival Libyan National Oil Companies (NOC), one based in the east in Bayda and the other in the west in Tripoli, have agreed to unify. This is just one small step in restoring production and exports of oil from Libya.

The Tripoli-based NOC is the one recognized by the UN, most of the international community and the UN-backed Government of National Accord (GNA), while the Bayda-based NOC is recognized by the rival House of Representatives (HoR) based in Tobruk. The HoR has yet to recognize the GNA or vote confidence in it as required by the Libyan Political Agreement (LPA).

The unified NOC is described in a recent Digital Journal article. It is also reported in the Libya Gazette and here. While some analysts predict a rapid rise in production and exports, there are still many issues unresolved as a recent article in Bloomberg reports.

The article notes that the political division between the GNA and the HoR is still not solved. The agreement retains Mustafa Sanailla, the chair of the Tripoli-based NOC as chair of the new NOC and Naji al-Maighrabi, chair of the Bayda-based NOC, becomes a board member of the new NOC. In order to reach the agreement it was agreed that the headquarters of the NOC would move to Benghazi and that board meetings would occur there as soon as security admits. This is a move fraught with danger for the GNA, since Benghazi is controlled by the HoR and protected by Khalifa Haftar, the commander-in-chief of the Libyan National Army. Neither the HoR nor Haftar recognize the GNA. Even in negotiating with the eastern NOC, the GNA is violating its own prohibitions from dealing with "parallel institutions" not recognized as part of the legitimate structures of the GNA which is recognized by the UN and most countries as sole legitimate Libyan government. The HoR has gained considerable more leverage and legitimacy. The same general processes are under way in agreements between the two competing Libyan Central Banks. As long as the continued political division remains the agreement with regards to oil will be fragile although no doubt both sides wish to avoid returning to a situation where the competing parties prevent each other from producing and exporting oil resulting in a lose-lose game.

However, there are other factors that threaten increased production and export of oil. Much of the countries oil structure is damaged. Some of it was caused by attacks by the Islamic State but in other clashes as well. In many cases, the oil fields are in territory controlled by forces hostile to those in control of the ports where the oil is exported. Agreements have to be reached between groups such as the Petroleum Forces Guard and General Hafter who controls some of the oil fields.

Richard Mallinson, an analyst at Energy Aspects in London said:“I am not convinced the announcement about the reunification of the two rival NOCs will actually deliver any increase in production any time soon." The new government is struggling to unify the various factions and Haftar and his allies “have sufficient control of infrastructure and politics in the east to prevent the GNA from broadening its mandate.”

These divisions have resulted in oil production being 85 percent less than before the overthrow of Gadaffi. For example in the southwest of Libya, the El Feel and Sharar oil fields which together are Libya's largest are controlled by GNA allies. However, the pipeline linking the fields to the coast export ports are blocked by Zintani militia affiliated with General Hafar. The shipping terminal is controlled by allies of the Tripoli branch of the Petroleum Facilities Guard (PFG). In the east, some fields are controlled by Haftar's LNA forces, many of the export facilities are held by units of the PFG headed by Ibrahim Jodhran aligned at present with the GNA and a foe of Haftar.

As analyst Mattia Toaldo notes the merger between the two NOC's is a welcome step forward but "restarting production depends on forces who actually control installations". No single group has control. Those who do are often at odds with others. While output has increased in June by about 40,000 barrels a day to 320,00 barrels a month it is still quite low.

There are splits even within the Petroleum Facilities Guard with the Brega PFG backing Haftar. Exports remain shut down at Ras Lanuf, Zuetina, and Es Sider under the control of members of the PFG headed by Ibrahim Jodhran. Es Sider facilities are severely damaged and tanks are damaged at Ras Lanuf. The facilities suffer from lack of maintenance as well.

As Toaldo remarks, Haftar wants to spoil the LPA because one section deprives him of his position as commander in chief of the armed forces. As Tore Hamming, an analyst at Risk Intelligence based in Denmark puts it there may be more clashes between forces loyal to the GNA and those of Haftar's LNA: “It will probably become more violent, unless they find a solution over Haftar and his role in the Libyan setup. In this struggle, control of the oil becomes more important. I’m not optimistic for the short to medium term.”

However, Martin Kobler, Special Representative of the Secretary-General tweets; "Invited for Libyan political dialogue meeting after eid to discuss next steps on basis of the #LPA. Eid Mubarak to all!!" Kobler is no doubt planning some new stratagem to get around the need for the HoR to vote confidence in the GNA, as required by the LPA, since he has already failed numerous times to achieve this.

Safia, Gadaffi's widow allowed to return to home town in Libya

Former Libyan ruler Colonel Gadaffi's widow, Safia Farkash Gadaffi, has been given permission to return back to Libya to her home town of Bayda, in the east of the country.

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The Telegraph reports:

 Libyan officials have allowed Colonel Gaddafi's widow to return from exile abroad as part of a new program of national reconciliation.The Libyan authorities are keen to pacify the country's pro-Gaddafi tribes ahead of a planned major battle to retake the Islamic State-held city of Sirte, Colonel Gaddafi's home town.Strangely enough, the Telegraph does not say which Libyan officials have allowed Safia to return. I presume it is not those of the Government of National Accord (GNA) based in Tripoli but the government of PM Al-Thinni of the Tobruk-based House of Representatives (HoR). Many government facilities of the HoR are in Bayda and the HoR does not yet recognize the GNA since the HoR has not held an official vote of confidence in the GNA or amended the constitutional declaration of 2011. The local municipal council also agreed to the return of Safia and a number of her children. According to one source :Libyan authorities are embarking on this move to appease pro-Gaddafi tribes prior to their planned battle to retake the Islamic State-held city of Sirte, also the hometown of Colonel Gaddafi.

Again the "Libyan authorities" are not identified but are probably those of the HoR government. Both Haftar, commander-in-chief of the Libyan National Army (LNA) of the HoR, and the GNA are planning campaigns to retake Sirte. Sirte has many Gaddafi loyalists but is now the headquarters of the Islamic State in Syria. Many loyalists were embittered by their experience within the Salvation Government of the Tripoli-based General National Congress (GNC) and allied themselves with the jihadists in spite of Gadaffi's opposition to radical Islamists.

Many former military officers associated with the Gadaffi regime are now part of the LNA under Haftar. Haftar himself was part of the original coup that took power in 1969. However, Haftar was abandoned by Gadaffi during a losing war in Chad: In 1987, he became a prisoner of war during the war against Chad. While held prisoner, he and his fellow officers formed a group hoping to overthrow Gaddafi. He was released around 1990 in a deal with the United States government and spent nearly two decades in the United States, gaining U.S. citizenship.[3Many in Gadaffi's forces joined the rebels eventually with a number of them now serving with Haftar in the LNA. Haftar played an important military role in the revolution but some fear that Haftar wants to return to a Gadaffi-like regime. His Operation Dignity started in May of 2014 to rid Libya of Islamists, is aimed at all Islamists who oppose him not just the Islamic State.

Gadaffi's widow, Safia, supported him right up until he was killed outside of Sirte. Safia married Gadaffi in 1970 and bore six children by him. She fled Libya to Algeria in August of 2011 as the capital Tripoli fell to rebels: On 29 August, the Algerian government officially announced that Safia together with daughter Ayesha and sons Muhammad and Hannibal, had crossed into Algeria early on 29 August.[32][33] An Algerian Foreign Ministry official said all the people in the convoy were now in Algiers, and that none of them had been named in warrants issued by the International Criminal Court for possible war crimes charges.Safia breached some of the terms for her staying in Algeria and had to leave with other members of her family. They went to the Gulf state of Oman where they were given political asylum. Safia is reputed to be very rich although in March of 2012 the central bank of the UAE ordered all her accounts in the country frozen along with those of other former high-ranking officials of the Gadaffi government. The Wikipedia entry on Safia says: " It has been estimated that Farkash has an independent wealth of US$30Bn, which includes 20 tons of gold." There is a note that the source for this is not reliable!

Although not charged with any regime crimes, Safia's return is not without controversy. Many in Libya still hold grudges against the entire ruling Gadaffi family because of their lavish lifestyle and repression of opposition. As shown in the appended photo, even Bayda was the site of anti-Gadaffi demonstrations. Safia apparently met Gadaffi while nursing him in a hospital. While mostly keeping a low profile during his reign, she did appear with him in meetings with world leaders. She also went on radio to support Gadaffi during the uprising against him. One daughter, Aisha, is still believed to be in Oman.

American head of Libyan Constitutional Drafting Assembly dismissed

Libya's troubles aren't not only with the formation of the Government of National Accord (GNA), which now faces a vote of confidence next Tuesday in the internationally recognized House of Representatives (HoR).

There are also issues with the Constitutional Drafting Assembly (CDA). The CDA is charged with presenting a new Libyan constitution, which will form the basis for new elections and then an elected government to replace the Government of National Accord. The Al-Bayda Appeals Court, the administrative judiciary department, just delivered a verdict on Monday that will dismiss the chair of the CDA, Ali Al-Tarhouni.

The decision was stated as follows:First: It is urgent that the High National Election Commission (HNEC) decision (No. 29), which approves Ali Al-Tarhouni a member in the Constitution Drafting Assembly, is partially annulled.

Second: It is urgent that the Constitution Drafting Assembly's decision that approved Ali Al-Tarhouni as the head of the CDA is overruled.The problem is that Al-Tarhouni is a dual Libyan and American citizen. Two members of the CDA, Daw Aun, and Hamdi Yacoub, filed a lawsuit to dismiss Al-Tarhouni because he has dual citizenship. According to Libyan law, a citizen who takes another citizenship invalidates his or her Libyan citizenship. As a result, Al-Tarhouni is not qualified to serve as head of the CDA.

At the end of January, 11 members of the CDA boycotted assembly sessions as a protest and said they would not recognize its outcomes. The members complained of attempts to impose regionalism as a basis for the constitution. Some members even insisted that there be three regions and three capitals within Libya, as there had been formerly. The members were scathing in their criticism of Al-Tarhouni. One of the boycotters, Daou Al-Mansouri, said Al-Tarhouni addressed international organizations without the knowledge or permission of the group. The group accused him of obstructing the work of the CDA. The two members who filed suit against Al-Tarhouni were among the boycotters.

The CDA results so far have been rejected by outsiders as well. There was a recent protest by some Libyan judiciary. The group complained that the CDA paid no attention to their suggestions for the constitution and the necessity for an independent judiciary. The members said: “We suspend our communication with the Constitution Drafting Assembly after they violated the independency of the Libyan judiciary in the forthcoming constitution, not to mention that they also ignored all the recommendations in favor of the greater good of the country.”

They also said they would make a constitutional appeal against the CDA results in the Supreme Constitutional Court since the CDA had ignored their demands.

Finally, a number of municipalities in the west of Libya, rejected the outcomes of the CDA and demanded that the CDA stress the unity of Libya and renounce division and separation. The municipalities issued a statement which said that they all support the members who boycotted sessions at the end of January. The CDA's work committee put out a draft that referred to Libya as the Libyan Republic with three capitals. Tripoli would be the political capital, Benghazi the economic capital, and Sabha in the south, the touristic and cultural capital. The group rejected the regionalism implicit in the draft. Libya has no new government yet and even if it does finally get one, there will be no new elections until a new constitution is agreed upon.