By Chris Stephen

The head of the country’s National Oil Corporation is succeeding in pushing output higher against the odds, only for its ubiquitous militias to push it back down again

The latest force pressing down on Libya’s crude production comes from a familiar source: militias holding oil facilities to ransom.

On 23 February, the Petroleum Facilities Guard (PFG), a state-funded militia, forcibly closed the southwestern El Feel field, a joint venture between NOC and Italy’s Eni. NOC said the guards rioted, firing in the air and threatening staff who fled the site. As a result, El Feel’s 70,000 barrels a day of production ceased. NOC declared force majeure on supplies from the field.

NOC chairman and chief executive Mustafa Sanalla has previously complained about militias trying to control oil facilities. In February, Sanalla told Petroleum Economist that “all Libyans depend on NOC’s oil production, but some are trying to grab a larger piece of the pie for themselves”.

The PFG has tried strong-arm action before. For nearly two years, some of its units blockaded four central oil ports, including Libya’s biggest—Es-Sider—demanding cash payments. That blockade ended when the ports were captured by the eastern Libyan National Army (LNA) in September 2016. Since then, the country’s oil production has quadrupled towards 1m b/d.

NOC says the PFG is demanding wages for “hundreds” of people with no connection to the PFG, and has refused payment. But Sanalla has also tried diplomacy. Southwest Libya has long complained of neglect, and Sanalla has called for more investment in the region, alongside a demand that the Tripoli-based Government of National Accord (GNA) discipline the PFG.

The latter demand is unlikely to be met. The UN-backed GNA is weak, with no security forces of its own, and relies on state-funded militias for security. The only force that could act against the PFG would be another militia.

Escalating conflict

More trouble may be on the horizon in the southwest, with fighting raging in the regional capital, Sabha. Here, three groups vie for influence: the ethnic Tebu, who form El Feel’s PFG, the Tuareg, whose 30th Brigade secure nearby Sharara—at 300,000 b/d the country’s largest-producing field—and the Suleiman tribe which controls much of Sebha.

The apparent cause of the fighting is a recent alignment that has seen the LNA, commanded by Khalifa Haftar, ally with Suleiman leaders, which in turn has alienated former LNA allies the Tebu.

If the fighting spreads, it may affect Sharara—a joint venture involving NOC, Repsol, Total and Statoil—which saw frequent militia shutdowns in 2017.

The El Feel closure comes just as NOC was celebrating success on other fronts. In January, Germany’s Wintershall resumed 57,000 b/d production in the Sirte Basin, home to two-thirds of Libya’s oil reserves, after the local municipality closed the fields in November demanding jobs and development projects.

The Sirte Basin’s largest joint venture, Waha, has reported production figures of 300,000 b/d-a 50,000 b/d jump in four months.

Confident of further production hikes, France’s Total announced in early March that it had bought the 16.33% stake in Waha, held by America’s Marathon Oil.

Total already partners the NOC in ventures at the offshore Al Jurf field and Sharara. It now partners US firms ConocoPhillips and Hess and the NOC in Waha. The company’s chairman said in November it hopes to expand production to 600,000 b/d within five years.

Buyers of Libyan crude seem more confident. PetroChina is set to buy Libyan oil for the first time since 2013. This follows similar announcements from BP and Shell in January.

Despite the El Feel shutdown, total Libyan oil production is now at a three-year high and exports reached 1.19m b/d in February, according to Bloomberg. That’s up from shipments of 969,000 b/d in January.

A further boost to NOC has come from the US Treasury Department, which in February announced sanctions against oil smugglers. Fuel smuggling from western Libya via small tankers to Italy and Malta is big business, and there is dismay in some quarters that Nato warships monitoring the UN’s arms embargo fail to intercept smuggling ships.

The US Treasury has sanctioned six individuals, seven vessels and 24 companies, many based in Malta and Italy, and estimates Libyan oil smuggling to be a €30m operation.

Smuggler suspects have also been arrested in Italy and Maltese authorities say they will study evidence provided by the US.

Sanalla has complained for months about gasoline smuggling so Washington’s action is welcome support. But his key problem remains Libya’s ubiquitous militias. And with no sign of a political settlement to end the country’s chaos, that problem is not going away.


Chris StephenLibya + Tunisia Correspondent, The Guardian. Author, Judgement Day: The Trial of Slobodan Milosevic (Atlantic Monthly Press)


Related Articles