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AfrElec COMMENTARY AfrElec

Libyan: Still on hold?

LNA chief Haftar has apparently not lifted the blockade preventing
the country’s coastal terminals from exporting crude

LIBYA LIBYA’S oil industry has remained largely idle The North African country was producing
this week, despite promises by Khalifa Haftar, the more than 900,000 barrels per day (bpd) in early
WHAT: leader of the Libyan National Army (LNA), to January, but yields sank to less than 100,000
Haftar promised to let lift his blockade of coastal export terminals and bpd just a few months later as a result of clashes
the oil industry resume other infrastructure facilities owned by National between GNA and LNA forces. In the course
exports by September Oil Corp. (NOC). of the fighting, LNA troops and allied groups
12, according to the US Reports on the possibility of a re-opening seized control of the coastal terminals and key
Embassy in Tripoli began circulating on September 12. On that date, infrastructure such as ports and storage depots.
the US Embassy in Tripoli issued a statement on NOC responded by declaring force majeure, and
WHY: a recent exchange of letters between Haftar and production sank accordingly.
As of press time, exports Ambassador Richard Norland. If that declaration could be reversed, Libya
were still on hold and the In its statement, the embassy said that the might be in a position to bring production back
LNA chief was faced with LNA leader had made a “personal commitment up to January levels, a move that would surely
a political crisis among … to allow the full re-opening of the energy have a bearish effect on world oil markets. NOC
allies in Benghazi sector no later than September 12.” It noted that expressed hope about its chances earlier this
Haftar had made that pledge as rival Libyan fac- summer, after GNA troops reclaimed some ter-
WHAT NEXT: tions, including the Tripoli-based Government ritory back from Haftar and his allies.
Oil flows are not likely to of National Accord (GNA), came together for Since then, though, there have been more
be restarted this month UN-facilitated talks and said it hoped this turn of armed clashes, and the rival factions are now at a
events would benefit both NOC and the Libyan stalemate, with the front lines firmed up around
energy sector as a whole. Sirte. Consequently force majeure is back in
“The embassy welcomes what appears to be place, and Libya’s crude output has remained
a Libyan consensus that it is time to re-open the low.
energy sector,” the statement said. “As Libyans
suffer from an acute electricity crisis rooted in No material changes
the forced shutdown of oil and gas production, As of press time, there had been no material
grapple with the [coronavirus] COVID-19 pan- changes in the situation, despite Haftar’s promise
demic and confront the threat posed by foreign to the US Embassy.
mercenaries and armed groups at critical energy Arab News reported September 16 that the
infrastructure sites, the implementation of these LNA chief had met with Ayman Badie, the head
commitments is urgently needed to promote the of Egypt’s national committee for Libyan affairs,
well-being of the Libyan people.” in Benghazi on the previous day. It said Haftar
had informed Badie that there were “guarantees”
Impact on prices in place to ensure that Libyan oilfields and other
The US embassy’s announcement led some NOC assets would not fall under the control of
industry observers to speculate about the pos- mercenaries or local militias. But it also said that
sibility that world crude prices might sink in the parties had discussed the possibility – not the
response to the restoration of Libyan production. reality, but only the possibility – of renewed oil

P6 www. NEWSBASE .com Week 37 17•September•2020