Page 9 - AfrOil Week 26

AfrOil PolICy AfrOil
Setback for LNA, but oil continues flowing
lIbya
FORCES from Libya’s Government of National Accord (GNA) seized the town of Gharyan on June 26, in what has been seen as a major set- back for the Libyan National Army (LNA) and its leader, General Khalifa Hi er. e LNA is besieging Tripoli but the loss of Gharyan – some 80 km to the south of the capital – will put pres- sure on its supply lines.
Images appeared on social media of GNA forces celebrating the capture of the town last week. is seems to have been accomplished through a combination of ground and air forces, while some of the town’s inhabitants provided support. Sudanese and Chadian mercenaries have also been reported to be working with the GNA forces.
e LNA claims a counter-attack is under way, while some o cials were reported as saying they had made a tactical withdrawal. While Hi - er’s forces played down the impact of losing the town, it will hinder the LNA’s ability to pursue its operations around Tripoli.
The LNA began its campaign against the capital in April, but progress has been slow. Var- ious international bodies, including the United Nations, have called for peace but some coun- tries appear to be providing support for the LNA. ese include Egypt and the United Arab Emirates (UAE), while France has been seen as sympathetic to Hi er’s cause, as is Russia. US President Donald Trump had a telephone call with the general in April, which was also inter- preted by some as support for the cause by the US – which would mark a major departure from that country’s stated line.
The LNA forces abandoned materiel in their escape from Gharyan, including Javelin missiles. ese are made by the US and are thought to have been provided to the LNA by the UAE.
On June 28, the LNA complained – via social media – of “illegitimate Turkish aggression” within Libya. In response, it said, it had issued orders to the air force to target Turkish ships within Libyan territorial waters. Furthermore, ground forces were told to “target all Turk- ish strategic targets such as companies, head- quarters and projects belonging to the Turkish government, they are all considered legitimate targets”.
e order to target Turkish interests appears linked to the LNA’s defeat in Gharyan. Turkish Petroleum Overseas Co. (TPOC), a subsidiary of TPAO, was awarded Area 147/3-4, in the Murzuq Basin, during the 2005 bid round.
Oil ows
In the bizarre world of Libyan politics, though, the ghting has had little impact on oil ows. Libya’s state-owned National Oil Corp. (NOC) said income in May had reached US$2.3bn, up on the month by US$448mn. e company acknowledged higher prices had helped, but this was supported by a “busy crude loading schedule”.
NOC’s head, Mustafa Sanalla, said the increase demonstrated the importance of the oil sector to the country. “Our focus on crude pro- duction, despite ongoing security challenges, continues to bring success, with over US$725mn having been spent on exploration and drilling since 2018. Oil revenues are the lifeblood of the Libyan economy.”
He did warn, though, that any interruption in NOC’s work would a ect its ability to main- tain production and nance services. “Despite repeated warnings, corporation facilities and operations are being directly targeted by con- ict. NOC condemns all attempts to militarise national energy infrastructure.”
e statement went on to warn that NOC should not be seen as playing a role in the con- ict. Revenues from the company are disclosed monthly and transferred to the Central Bank of Libya (CBL).
One reason the oil industry has been largely untouched by the con ict is that the LNA has opted not to attempt to leverage its control of oil infrastructure into extraction of cash. e group took control of the “oil cres- cent” in late 2016 and allowed exports to ow unhindered, with cash owing – via NOC – to the CBL in Tripoli. e reason for this appears to be that if it did try to extract cash from this resource direct it would lose international legitimacy.
However, a report published in June by Noria Research strongly suggested that the LNA was earning money through the smuggling of fuel products in eastern Libya. e report went on to ag up high-level connections between senior o cials in the House of Representatives (HoR), which nominally controls the LNA, and various smugglers.
Noria went on to raise the question of what wouldoccurshouldtheLNAsucceedinitstake- over of Tripoli – and with it the CBL and NOC. It reported some sources as saying that “certain international and regional sponsor states were promised by the LNA leadership a number of oil concessions and infrastructure contracts”. ™
Week 26 02•July•2019 w w w . N E W S B A S E . c o m
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