By Patrick Wintour
Libyan national oil corporation says contract with Rosneft to redevelop oilfields lays groundwork for further investment. Russia has significantly boosted its involvement in Libya by signing a potentially major contract to help redevelop Libyan oilfields.
The head of the Libyan national oil corporation (NOC) signed a cooperation agreement with Rosneft, the Russian oil giant, which NOC said on Tuesday “lays the groundwork for investment by Rosneft in Libya’s oil sector”.
“The agreement envisages the establishment of a joint working committee of the two partners to evaluate opportunities in a variety of sectors, including exploration and production,” an NOC statement said.
Russia had extensive investments in Libya before the fall of Muammar Gaddafi in 2011, and is eager to recover as many of them as possible in a country still plagued by violent conflict but keen to boost oil production with the help of foreign companies.
In recent months Vladimir Putin has become increasingly embroiled in the country as western-backed efforts to end the long-running political impasse have failed to soothe disagreements between factions in the east and the UN-recognised government of national accord (GNA) in Tripoli.
Russia is increasingly seen as a key player in persuading Khalifa Haftar, the head of the self-styled Libyan National Army based in the east of the country, to compromise over a future role in a new consensus government. Haftar’s forces control most of Libya’s oil resources.
Efforts to secure a new political future for Libya have stalled after the failure of an Egyptian-led process, which saw Haftar travel to Cairo but refuse to meet the leader of the GNA, Fayez al-Sarraj.
Despite the snub, Sarraj has agreed to changes in the composition of his government but, in a sign of the country’s fragility, he survived an assassination attempt on Monday in Tripoli along with two of his senior aides.
Haftar has sought Moscow’s help to battle Islamic State, but European diplomats fear he could join what has been described as Putin’s axis of secular authoritarians in the Middle East alongside the Syrian president, Bashar al-Assad, and the Egyptian president, Abdel Fatah al-Sisi.
Libya is one of a handful of Opec members who have been spared the need to reduce crude oil production in the first half of this year. Opec and 11 independent oil producers have agreed to cut output by a total of 1.2m barrels per day. However, Iran, Nigeria and Libya were permitted not to cap and even to increase oil production due to their complicated political environments.
Italy’s Eni and France’s Total are working in Libya and Schlumberger , the world’s largest oilfield services company, resumed operations in the country about three months ago.
Mustafa Sanalla, the chairman of NOC, one of the few functioning, bipartisan technocratic bodies in Libya, signed the agreement with the Rosneft chairman, Igor Sechin.
“We need the assistance and investment of major international oil companies to reach our production goals and stabilise our economy,” said Sanalla. “This agreement with Russia’s largest oil company lays the foundations for us jointly to identify areas of cooperation. Working with NOC, Rosneft and Russia can play an important and constructive role in Libya.”
Patrick Wintour – Diplomatic editor