Petroleum profits, control and fragility in Libya
Matt Herbert and Emadeddin Badi
INTRODUCTION
For the past decade, Libya has been a deeply fragile state. Disputes over political control and legitimacy have birthed several competing governments and centres of authority. At the sub-state level, political competition and tension are a mainstay in many areas, fuelling conflict between ethnic and tribal groups, and within these groups.
Armed groups remain proliferate and well-equipped, exerting de facto security control in most areas, even as many are deeply enmeshed in profiteering off both the licit and illicit economies. Libya’s fragility emanates from several underlying factors, such as disputes over political control, both at the national and local levels, as well profiteering and corruption linked to the illicit economy.
Libya’s petroleum product wealth, encompassing both oil and natural gas, is also a factor affecting fragility; however, unlike contentious politics or criminal activity, it has both positive and negative dimensions.
The National Oil Corporation (NOC), the entity in charge of oil and gas production and sales, is one of the few official entities that has largely remained cohesive and unitary since 2011, enabling continued production and sales even during periods of protracted political unrest.
The resultant resources have enabled Libya to continue to provide subsidies and payments to public servants, and more broadly an economic buffer for many citizens against gaps in service delivery by state institutions and chronic violence. However, the central economic importance of petroleum products has also led to negative impacts on Libya’s fragility.
Contestation and grievance over the distribution of oil profits have driven intercommunal and inter-regional conflicts. Further, a variety of actors have seized on the disruption of oil and gas production, transport, or export as a means of exerting pressure on the central government’s authorities or a means of waging economic warfare on the state.
The financial ramifications can be substantial, with one two-day shutdown of an oil pipeline in western Libya in March 2022 leading to LYD320 million (Euro €63 million) in economic losses for the state. Because of the importance of oil and gas revenues as a stabilizing dynamic, and the impact on fragility of disruption, protection of petroleum product resources has emerged as a key challenge in post-revolutionary Libya.
The responsibility is held by the Petroleum Facilities Guard (PFG, haras al-munshaat al-naftiya), a large force technically controlled by the Ministry of Defence (MOD). The NOC is one of the few functional governmental bodies in Libya. However, as the force mandated with protecting it, and protecting its operations, the PFG mirrors some of the worst of Libya’s institutional weaknesses and dysfunctionality.
Since 2011, the PFG has evolved into a hybrid force, composed of numerous armed groups linked to communities abutting oil- and gas-production facilities. The force has become the key actor threatening oil production and sales, with individual units involved – in part or in full – in nearly all instances in which the production, transport or export of oil has been disrupted in recent years.
Because of this, it is important to understand the PFG, particularly its dysfunctions, given the substantial economic ramifications that the group’s actions have on Libya’s economic fortunes and on state fragility.
This report details the interlinkages between oil and natural gas production and fragility in Libya, and the impact of the PFG on these:
(a) It begins by detailing how oil and gas production has fuelled both stability and instability in Libya, both before and in the wake of the 2011 revolution.
(b) It then assesses the formal structure and mandate of the PFG, detailing its evolution and current disposition.
(c) Third, it details the security and PFG dynamics at key oil and gas production and export sites in western and eastern Libya, evaluating the connection between protection and fragility.
(d) Finally, the report concludes with a set of recommendations.
The report is based on the GI-TOC’s Field Monitoring System. Between late 2021 and January 2022, the reporting period for this study, local field researchers in Libya conducted interviews and collected data at key oil-extraction, transportation, and export sites.
Field data was supplemented by the collection of opensource data relevant to oil issues and the PFG, including from think-tank reports, media articles, organizational websites, and social-media platforms.
***
Dr Matt Herbert is a Senior Expert at the Global Initiative Against Transnational Organized Crime (GITOC), managing research activities for the North Africa and Sahel Observatory (NAS-Obs). He specializes in transnational organized crime, fragility, stabilization, and security-sector reform and governance. He holds a PhD in International Relations from The Fletcher School of Law and Diplomacy, Tufts University.
Emadeddin Badi is a Senior Analyst at the GI-TOC, focusing on the Special Projects Portfolio of the NASObs. He specializes in governance, post-conflict stabilization, hybrid security structures, security-sector reform and peacebuilding. He holds an MSc in Violence, Conflict and Development from the School of Oriental and African Studies (SOAS), University of London.
__________________
