Blockades of Libya’s export terminals risk cutting off virtually all of the OPEC member’s 1.2 million barrels per day in crude oil exports, warned the chairman of Libya’s National Oil Company (NOC), Mustafa Sanalla.
“We fully acknowledge there is corruption and injustice in Libya,” Sanalla said in a speech at Chatham House in London yesterday. “But acting illegally by blocking Libyan oil production will just lead to the further impoverishment of the Libyan state and erosion of the rule of law.”
Earlier this month, forces loyal to the eastern-based Libyan National Army (LNA), which is under the leadership of general Khalifa Haftar, seized Libya’s oil export terminals along the southern shores of the Mediterranean as well as some oil fields and pipelines. The move came after Haftar recently escalated a years-long campaign to capture the capital of Tripoli, which sits in the west of the country and is the seat of the United Nations-backed Government of National Accord (GNA).
The NOC and Sanalla have been at pains to act and be seen as a neutral party in the long-running conflict between the GNA and the LNA, since supporting either side could invite retaliatory strikes on oil infrastructure. Oil production has suffered intermittent disruptions, but has recently remained out of the line of fire.
Libya’s crude exports have already dropped to just 262,000 barrels per day and could fall below 100,000 barrels per day, Sanalla earlier told Bloomberg TV, down from around 1.2 million barrels per day. Potentially more damaging, Libya has scant storage capacity, forcing NOC to halt much oil production and leave crude oil stuck in pipelines, where they could cause corrosion.
Blockades of Libya’s Brega, Ras Lanuf, Hariga, Zueitina, and Sidra ports are costing the country $55 million dollars per day in lost revenue, NOC has said. Without that money, Libya may not be able to move ahead with plans to invest in new oil infrastructure. “We were told that NOC will not receive the requested budget it needs for its ambitious programme to expand oil production,” said Sanalla at Chatham House.
Libya’s civil war is the poisoned fruit of a successful NATO-backed campaign in 2011 to oust dictator Muammar el-Qaddafi. Neither side has managed to claim victory because each is being supported by foreign governments, with Russia and the UAE on the side of the LNA, and Turkey and many Western governments on the side of Tripoli.
Just a week ago, leaders of many of these countries agreed at a summit in Berlin to uphold an embargo on supplying arms to either side in the conflict. But the deal quickly fell apart. Haftar responded to the agreement by resuming shelling of Tripoli.
“Over the last ten days, numerous cargo and other flights have been observed landing at Libyan airports in the western and eastern parts of the country providing the parties with advanced weapons, armoured vehicles, advisers and fighters,” according to the United Nations Support Mission in Libya (UNSMIL) on 25 January.