A wider political settlement is a prerequisite to increased

Libyan oil production? Analysis
By Sami Zaptia.

The international community led by UNSMIL see that increasing Libya’s oil production is
key to empowering the Faiez Serraj-led Presidency Council/Government of National Accord
(PC/GNA), the only internationally recognized government in Libya.
They see that increased Libyan state revenues could give room for Faiez Serraj to solve some of
the country’s mounting and acute problems such as a confidence deficit, extremism, illegal
migration, insecurity and high crime rates, the budget deficit, inflation and high prices, cash
shortages at banks, medicine shortages, power, water and internet cuts and the internally
displaced Libyans escaping regional clashes.
As a result, UNSMIL head, Martin Kobler met in the eastern oil port of Ras Lanuf last week with
regional strongman and Petroleum Facilities Guard leader Ibrahim Jadhran in an attempt to
restart production in Libya’s stalled eastern oilfields.
Jadhran has been preventing the export of oil from the local coastal oil port terminals under his
control since the time of Prime Minister Ali Zeidan back in August 2013. As a result, Libyan oil
production has plummeted from a post Qaddafi high of 1.5 million in 2013, down to anything
from 200,000 to 400,000 bpd.
However, after the Kobler-Jadhran meeting, a group of tribal leaders claiming to represent the
inland regions where the eastern oilfields are located, as opposed to where the oil exporting ports
are located, have thrown a spanner in Kobler’s plans by distancing themselves from the KoblerJadhran meeting and of any agreement that might emerge from it.
They point out that while Jadhran may have control over the oil exporting ports and storage
tankers at the end of the pipelines, Jadhran does not have control over the actual inland
production oilfields nor the pipelines that lead up to the coastal oil terminals and ports.
The tribal leaders insist that Kobler must talk to them separately and strike a separate deal with
them if he wishes to restart Libya’s oil production. Moreover, they declare their political
allegiance to Hafter, the internationally unrecognized Thinni government and the House of
Representatives in Tobruk.
To make things worse, in a leaked letter sent to Kobler after his meeting with Jadhran, Tripoli
National Oil Corporation (NOC) chairman Mustafa Sanalla tells the UNSMIL chief that his NOC
will not lift the state of force majeure it has declared on the oil ports and terminals blockaded by
Jadhran in fear of possible costly legal claims against the NOC by damaged foreign EPSA
partners and other parties.
Initially, UNSMIL may have thought that if it succeeded in simply reuniting the two western and
eastern administrations of the NOC in Tripoli and Benghazi, it could succeed in restarting Libya’s
oil production. However, it is clear now that the problem of increasing Libya’s oil production was
never an administrative problem. The problem of increased oil production now rests out in the

This would be a great boost in the arm for Libya’s deficit-ridden government.000 bpd.oilfields. all four pipelines from Sharara. The two fields are only a few km apart. The hope was that the oilfields in the Hamada al Hamra and Murzuk basin could quickly ramp up production in the short term to around 600. Naji Magharbi. It is operated by Akakus Oil. The same principle applies to Libya’s western oilfields. about 40 km away from Zintan. It will be borne in mind that one of the nine members of the Presidency Council representing Zintan. NOC sources have told Libya Herald that discussions have been ongoing at a technical level to increase oil production from Libya’s south/western oilfields. a NOC-Repsol joint venture. however. Omar Aswad is currently boycotting the Presidency Council. Presidency Council member Ali Gatrani who represents the east is also boycotting the body. They have partially closed the valve/valves of the pipeline in the Riyayna region. . but indicate the intricacies of post-Qaddafi Libya’s politics. Al-Fil (Feel).2 million bpd within six months. It is not clear even if the PC/GNA had initiated or supported Kobler’s meeting with Jadhran. Production has been deliberately reduced in a political move by Zintan. invest in needed infrastructure or maintain its economy unless it pumps a minimum of 800. also condemned the Kobler meeting with Jadhran stressing that Jadhran had no legal authority to lift the force majeure on the ports and resume oil exports. Indeed. Optimists think that between the east and west production could be increased to 800. It is not clear what the political deal and quid pro quo that the Serraj-led PC/GNA is going to be offering the Zintanis. Kobler must now mediate between the three parties: the two NOC’s and Jadhran in a complex and delicate three-way tug-of-war.000 bpd. but with bringing security to the community. is controlled by Tebus. the problem with increasing production from the south/western fields is not at the Zawia terminus port on the coast or at the oilfields themselves. balancing his keenness to quickly resume oil production with issues of setting a precedent.000 in the short term and up to 1. travelling from the southern oilfields to Zawia oil port and refinery. Al-Hamada Al Hamra and Wafa fields pass through a valve station in Riyayna. terminals and ports – and in the populations surrounding and controlling them. All the fields in the Murzuk basin use pipelines that run past Zintan to Zawia port. the chairman of the Benghazi-based NOC. The on-off closure of the Sharara oilfield in the Murzuk basin is a perfect example. Jonathan Winer has said that the economic reality is that Libya cannot pay its salaries. pipelines. The Eni Fil/Feel (Elephant) field. It was taken over by pro-Libya Dawn Tuaregs and members of Misrata’s Third Force in November 2014 loyal to the de facto Tripoli administration at the time. They had forced out the Zintani and Tebu forces who had been guarding it. US Special Envoy for Libya. Whats is clear is that the Tripoli NOC was either not consulted or overruled. However. Speaking on Libyan TV. legitimacy and political sensitivities. He added that the conflict over oil exports would not end with the decision to open or close the oil ports.

Some may even contend that with the widespread dispersion of weapons and militias in postQaddafi Libya. They see the Presidency Council as being propped-up by the very militias that ejected the Zintani forces out of Tripoli in 2014. regional and ethnic groups that Libyans need to unite to ensure the continued production and export of oil. tribal. Tebu and Tuareg people of Libya – all within striking distance from one sort of oil facility or another that are scattered across the 1. The pessimistic and glass half empty view is that it would be impossible to strike a deal as oil facilities are widely dispersed traversing many local power centres and internecine conflicts. .76 million square km of Libya: the 17th largest country in the world. the country may have become ungovernable in the classical sense by any one central authority. Add to this is the myriad of unmet demands by various regional groups such as the Amazigh. city and regional priorities than national priorities. Oil facilities blockades could become the perfect mechanism to get heard and noticed in the distant urban political centres of Tripoli. storage and export facilities very vulnerable to the smallest of militias which is able to exert a huge amount of leverage totally disproportionate to its size. Tebu and Tuareg from the centre – it is easy to favour the pessimistic outlook. power centres. consider the Serraj Presidency Council to be dominated by Misrata and its ‘’Islamist’’ allies. if Libyans do not unite and cooperate and live in a peaceful civil society they would indeed be destined to a collapse of the easy and relatively prosperous life they had become accustomed to for decades. Libya’s oil production facilities could prove to be the ideal tool for the various contending Libyan power centres to express their political differences and fissures. British ambassador Peter Millett raised this very point in his House of Lords report in July and speculated that it may take some time to create a unified Libyan identity.How likely is it that the seven other non-boycotting Presidency Council members will be able to convince Aswad to end his boycott and convince his city to open up the Riyayna pipeline valve? How likely is it that Kobler will be able to bypass Aswad and appeal directly to the city of Zintan itself? Zintan. The inhabitants of the country seem more defined and united by family. This is exactly what Mustafa Sanalla said to Kobler in his (leaked) letter Zintan is firmly allied with Hafter. it will enshrine the principle and precedent for all other power centres. had turned back Kobler’s security advisor Paolo Serra when his plane landed at Zintan airport back in May this year. the Thinni government and the House of Representatives in the east. Tobruk. Benghazi. However. It is precisely because Libya’s oil facilities are dispersed amongst the different Libyan tribes. it will be recalled. Misrata or Zintan. They also object to the failure of the Presidency Council to rule by consensus and to its failure to form a unified non-tribal/city/regional based army which would include its forces as well as the HoR recognized and Hafter-led Libyan National Army Then there are all the political grievances of the minority Amazigh. Beida. There are two ways of looking at the politics of increasing Libyan oil production. What would be the incentive for Zintan to empower Serraj and his PC/GNA in Tripoli having been forcibly ejected out of the capital by the GNC/Libya Dawn coup in the summer of 2014? Zintan and its boycotting Presidency Council member Aswad. This makes the numerous oil production. If Jadhran is indeed rewarded for his oil ports blockade.

This led them to make their unsuccessful attempts to export oil outside the channels of the Tripoli NOC. with the continued contested legitimacy of Libya’s institutions and in the absence of a strong Libyan central state with a monopoly on the legitimate use of force. The divisions are many. for UNSMIL chief Marti Kobler is how to get all the myriad Libyan power centres around the same table and how to get them to appreciate their interdependence. That much they may agree upon in principle. Currently. while eastern Libya controlled two-thirds of Libya’s oil production. Libya’s oil revenues are deposited by foreign importers into bank accounts controlled by the Tripoli-based Central Bank of Libya. In effect. as well as fighting IS and stemming illegal migration.Rentier state Libya presently has no other source of income on tap. Both sides need each other to complete the circle. But equally. In short. due to old historical contracts. the eastern-based authorities were doomed. It will also do nothing to save the PC/GNA which the international community is pinning all of its hopes on in order to solve both Libya’s internal problems. Libyans must therefore cooperate at least out of pragmatic self-interest in order to ensure the continuation of oil production and exports. Despite enjoying universal international recognition up until early 2016. If total oil production is ceased. The divisions start when it comes to the control and distribution of those oil revenues. national reconciliation and a process of establishing a Libyan social contract – all in one and at the same time. Solving Libya’s increased oil production is about solving the post-Qaddafi conundrum of Libya. There is a final kamikaze scenario where the Tripoli authorities refuse to pay the salaries of the other regions or where the remaining few oilfields pumping oil shut down. legitimacy and power have become dispersed to the nth degree. There is the west-east division. therefore. Libya will be forced to exhaust its foreign currency reserves down to zero. The Beida-based Abdullah Thinni government and the Tobruk-based House of Representatives have found this out to their cost since they were ejected from Tripoli in 2014. whilst Tripoli holds the purse strings it only nominally at least has one third of the country’s oilfields within its region. Restarting Libya’s oil production is about much more than opening oil ports or oilfields here or there. they were totally incapacitated and unable to project or leverage their legitimacy from the east without control over the oil revenues. Post Qaddafi. Kobler must engage in nation-building. the coastal-interior division as well as the ethnic Arab-non Arab divisions. Then he has to come up with an almost impossible formula for dividing the oil money that is acceptable to all. . This is a process that should have started in 2011 and is likely to take a number of years – which does nothing to solve the long list of acute everyday problems Libyans are facing today. its cash reserves are estimated to be adequate for only two to three years. it did not have access to the oil revenues. Whoever has controlled Tripoli has been able to control the country’s purse strings. The challenge. Power and legitimacy have become localized to the extent that Libya has become dysfunctional with no unified aims or processes. With the international community resisting this move.