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article imageOp-Ed: Haftar's return of oil ports to Libyan National Oil Company

By Ken Hanly     Sep 15, 2016 in Politics
The four export ports in Libya's Oil Crescent seized by Libyan general Khalifa Haftar were turned over to the Libyan National Oil Company based in Tripoli.
General Haftar launched Operation Surprise Lightning on September 11. With little resistance, Haftar's forces ended up in control of four ports: Ras Lanuf, Es Sidra, Zuwetina, and Brega. Haftar subsequently turned over control of the ports to the Tripoli-Based NOC. I believe that the situation as it is now is the result of an agreement between the head of the NOC Mustafa Sanalla and Haftar. The agreement I believe was along the following lines. Haftar would seize the ports that were under the control of the Petroleum Forces Guards a group whose leader Ibrahim Jodhran Sanalla hates. He had vehemently criticized the deal between the GNA and Jadhran even though Jadhran, unlike Haftar, accepted the authority of the GNA. In return, Haftar would agree to turn over the ports to the control of the NOC. As a reward for doing so, the NOC would ensure that the rival government, the HoR government of PM Al-Thinni would receive a share of the proceeds from oil revenues that it found acceptable. Sanalla would also lift the force majeure that was preventing foreign ships from loading oil for export at the ports.
It seems Martin Kobler, Special Representative of the Secreatry-General (SRSG) and many in the international community were not aware of the deal or at least their actions suggest that they were expecting the deal to make it more difficult to export oil. Kobler said that it would make oil export more difficult. Six nations issued a statement echoing Kobler and also demanding that Haftar withdraw his military forces. You will not hear that demand repeated any more. The emerging consensus is that oil exports will now be quickly increased. As a recent tweet puts it: "Two oil vessels docked at #RasLanuf and #Brega today to load over 1.2 million barrels of crude #OilCrescent." Sanalla had made Kobler look foolish in claiming that oil exports would be more difficult. Sanalla hated Kobler for arranging the deal with Jadhran. He was also angry with the UN-backed Government of National Accord (GNA) in that it had not been advancing the money needed to do work on damaged oil facilities. The nations asking for a withdrawal will no doubt be silent from now on about the issue and applaud the great leap forward toward greater production and export of oil from Libya.
For some reason the press often shows not the slightest curiousity about the most obviously important issues. To illustrate this consider the Reuters and Wall Street Journal's report on the merger of the Tripoli-based National Oil Company (NOC) associated with the GNA and the Bayda-based NOC associated with the Al-Thinni government and the House of Representatives. The issue of the division of the oil revenues is not discussed at all or even brought up. The Reuters report does say: "The NOC said it recognized the presidential council as the executive and also the parliament in the east, the House of Representatives. It would report to both bodies... It plans to make its new headquarters in the eastern city of Benghazi." Note that the deal recognizes the parliament in the east, the HoR. However as things stand now this is in fact recognizing a parallel institution: the HoR government of Al-Thinni supported by Haftar. The merger also agreed to move the headquarters to Benghazi, a city controlled by the HoR rival government. So much for not dealing with parallel institutions.
Yet this was not enough for the HoR, which rejected the merger. Whatever the deal was with respect to dividing revenues it did not satisfy the HoR. Al-Thinni PM of the HoR totally rejected the deal and among other things demanded: "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 percent goes to the western and southern regions." No follow up on this by the press. However a recent tweet shows that the deal is still not agreed upon and that the heads of the two rival NOC's will meet soon to finish the deal: "#Libya | Chairman of eastern NOC says he'll meet Tripoli NOC chairman next week to unite the two corporations & re-open oil ports."
The NOC will now most certainly be funding not just the GNA but also the rival government of Al-Thinni and the HoR. Haftar can make sure that the division of receipts is sufficient for adequate funding of his armed forces. The UN and Kobler go on about the necessity not to deal with parallel institutions. However, its monopsonic NOC has obviously made a deal that ensures a rival parallel government is well funded. If the NOC breaks the deal, the ports and oil fields could very well close again. We have returned to the two government system that existed when the HoR and GNC Salvation Government were rivals.
The lose-lose situation where there were no oil revenues may no doubt be replaced by one in which Haftar is able to see oil exported from the ports he controls under the auspices of the officially accepted NOC associated with the GNA. However the merged NOC is also associated with and reports to the HoR and will be forced to finance the rival government. The headquarters will even be moved to Benghazi where Haftar, Al Thinni, and the sanctioned Saleh hold sway. For Sanallah this is fine in that under the former two governments the NOC was also neutral though based in Tripoli. He retained his job and got rid of the hated Jadhran. He also made Kobler look like a fool. Not a bad deal.
Of course my view may be completely wrong. There may be no deal at all. Sanalla and Haftar simply want to save Libya from that pirate Jadhran and ensure that since Libyan oil belongs to all Libyans its increased production and exports will result in revenues that will be distributed to and benefit all Libyans. Given that foreign oil companies benefit from what has happened perhaps this is the narrative that will prevail and be upheld by experts.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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