Page 5 - AfrOil Week 50 2021

AfrOil COMMENTARY AfrOil

The country is due to hold the vote on Decem- 2020, oilfields were repeatedly shut in following
ber 24, in line with the terms of the ceasefire attacks from armed groups and Russian merce-
agreement accepted by the factions within the naries backing the Libyan National Army (LNA)
GNU. However, there have been calls for a delay, led by Khalifa Haftar.”
as legal disputes have prevented the national According to Hamish Kinnear, a Middle East
election commission from finalising its list of and North Africa analyst for Verisk Maplecroft,
candidates for the presidency. (One of these dis- Libya’s oil and gas industry is also at risk because
putes concerned Saif al-Islam Qaddafi, one of disputes over the results of the upcoming presi-
Moammar Qaddafi’s sons, whose candidacy was dential vote have the potential to trigger fighting
recently reinstated after first being disqualified.) afterwards. “A ceasefire remains in place for now,
Even if there were no such disputes, the race but war could resume if the results of planned
is not likely to have a clear winner. To date, more elections are disputed,” he told NewsBase. “LNA
than 100 people have announced plans to run could apply pressure to Tripoli-based rivals by
for the presidency, and two of the best-known shutting down Libya’s oil and gas production, a IOCs may want
candidates are quite controversial. For instance, lifeline for the country’s economy.”
Prime Minister Abdul Hamid Dbeibah has put Kinnear also drew attention to the implica- to wait and see
his name forward, even though he pledged when tions of LNA’s dominance in areas that are key what happens
taking the helm of the GNU that he would not to the functioning of Libya’s oil industry, saying:
try for the presidency. Khalifa Haftar, the leader “Between 2011 and 2019, the main risk to oil after the Libyan
of the Libyan National Army (LNA), is also and gas production (and to a lesser extent power
standing for election, although he has no hope of plants and refineries) was shut-ins by a range elections before
securing enough ballots outside Libya’s southern of militia groups. The Libyan National Army
and eastern regions to win the vote. (LNA) consolidated its control of most of Libya’s making any
Under these circumstances, Libya may expe- oil and gas infrastructure by late 2019 and ran- new large-scale
rience violent unrest in the run-up to the elec- dom shut-ins became rarer. The flipside of this
tions. There are multiple reasons why this might is that LNA can choose to impose a near-nation- commitments
happen. Armed factions could start shooting at wide blockade on oil and gas exports if it chooses
each other again, as was the case in the south- to. LNA did exactly that in 2020 as a response to
ern city of Sabha on December 13, when local increasing Turkish involvement in Libya.”
security forces found themselves in a firefight
with LNA fighters. Popular discontent over Wait and see
postponement of the elections, failure to finalise In these conditions, it is far from clear that Lib-
the presidential candidate list or last-minute dis- ya’s oil, gas and power industry is on the verge
qualification of candidates could lead to demon- of attracting a massive new wave of investment.
strations and clashes with security forces. Certainly, IOCs are hardly likely to ignore
Libya, given the size of the North African coun-
Problems past, present and future try’s existing hydrocarbon reserves – and its
Martin Sherriff, head of the Middle East-North potential for future solar generation. However,
Africa (MENA) group at Welligence Energy they may want to wait and see what happens
Analytics, highlighted some of these problems after the elections before making any new large-
in a message to NewsBase. scale commitments.
“Planned elections in the country are close to As Kinnear noted, “exploration ... is still
collapse, which could shatter hopes [of] re-unit- [being] held back by the precarious political and
ing the divided country,” he wrote. “Further security situation in the country.” ™
conflict could reignite following the ceasefire in
2020, as rival factions have accused each other EDITOR’S NOTE: In Week 49 of AfrOil, the
of bribing and intimidating officials to reinstate article “IHS Markit: Jove Marine drilling
their candidates, which include high-profile could confirm Gabon’s pre-salt potential” said
figures such as warlord Khalifa Haftar and Saif Petronas believed the Jove Marine field would
al-Islam Qaddafi, the son of the former dictator.” be economical to develop if it held at least
Sherriff also noted that oil and gas sometimes 150mn barrels of oil in recoverable reserves
attracted negative attention, even in the absence and world crude prices averaged $70 per bar-
of controversy over elections. “Although NOC rel. This analysis should have been attributed
oilfields are normally the first to be targeted by to IHS Markit and not to Petronas, as it was
militia, any high-profile project is at risk from the main focus of the note referred to in the
being attacked,” he said. “Throughout 2019 and article. NewsBase regrets the error.

Libyan oil and gas infrastructure will need to be upgraded and rebuilt (Photo: NOC)

Week 50 15•December•2021 www. NEWSBASE .com P5