Page 5 - AfrOil Week 37

AfrOil COMMENTARY AfrOil

However, yields sank to less than 100,000 bpd this step in the wake of demonstrations in Beng-
just a few months later as a result of clashes hazi against electricity shortages and deteriorat-
between GNA and LNA forces. In the course ing living conditions.
of the fighting, LNA troops and allied groups On the same day, protests broke out in
seized control of the coastal terminals and key al-Marj, which is held by LNA. Al-Marj has
infrastructure such as ports and storage depots. experienced power shortages for the same rea-
NOC responded by declaring force majeure, and son as Benghazi – namely, local power stations’
production sank accordingly. inability to secure adequate fuel supplies as a
If that declaration could be reversed, Libya result of NOC’s troubles.
might be in a position to bring production back
up to January levels, a move that would surely Revenue distribution
have a bearish effect on world oil markets. NOC According to the UN Support Mission in Libya
expressed hope about its chances earlier this (UNSMIL), this civil unrest highlights “the
summer, after GNA troops reclaimed some ter- urgent need to lift the oil blockade,” as well as
ritory back from Haftar and his allies. the necessity of negotiating a “full and inclusive” “
Since then, though, there have been more solution for the country’s long-standing political Haftar has
armed clashes, and the rival factions are now at a crisis.
stalemate, with the front lines firmed up around The latter statement is probably a reference informed an
Sirte. Consequently force majeure is back in to quarrels over the distribution of oil revenues
place, and Libya’s crude output has remained earned by NOC. The LNA, like other factions Egyptian official
low. in eastern and southern Libya, has repeatedly that there are
complained that Tripoli keeps more than its fair
No material changes share of the money earned from crude exports, “guarantees” in
As of press time, there had been no material and it has indicated that it will not strike a deal
changes in the situation, despite Haftar’s prom- with the GNA unless the latter agrees to certain place to ensure
ise to the US Embassy. conditions.
Arab News reported September 16 that the According to previous reports, those are: that Libyan oil
LNA chief had met with Ayman Badie, the head preventing the use of oil revenues to fund the will not fall under
of Egypt’s national committee for Libyan affairs, activities of terrorist and mercenary groups;
in Benghazi on the previous day. It said Haftar auditing the central bank’s records of oil reve- the control of
had informed Badie that there were “guarantees” nue accounts for the last few years; and opening
in place to ensure that Libyan oilfields and other a designated bank account in another country mercenaries or
NOC assets would not fall under the control of outside Libya to ensure the equitable distribu-
mercenaries or local militias. But it also said that tion of oil revenue. local militias
the parties had discussed the possibility – not Haftar’s statement to Badie on September 15
the reality, but only the possibility – of renewed may indicate that the parties have succeeded in
oil shipments from Libya. meeting the first of these three conditions. Nev-
It is not clear whether this lack of action ertheless, it is not clear whether they have done
was related to a political crisis affecting one of the same for the other two issues.
LNA’s allied factions. According to press reports, Nor is it clear whether Haftar will be able to
Abdallah al-Thani, the prime minister of the uphold his pledge to lift the blockade that has left
Tobruk-based interim government known as the Libyan oil industry mostly idle for so many
the House of Representatives (HoR), submitted months. At this point, he may not be able to do
his resignation on September 13. Al-Thani took so before the end of the month. ™

BP warns that peak oil demand

may be just around the corner

BP has warned that oil demand will peak within past. The second, rapid, assumes a significant
the next few years, reflecting growing belief that increase in carbon prices and the introduction
the coronavirus (COVID-19) pandemic has of other aggressive policies to lower emissions.
brought forward the decline of fossil fuels. The third and final one, net zero, assumes
The oil and gas major published its Energy these policies are introduced but also supported
Outlook 2020 on September 14, outlining three by significant shifts in societal and consumer
scenarios for global energy demand. The first, behaviour and preferences. This will result in
business-as-usual, assumes that trends in gov- carbon emissions dropping more than 95% by
ernment policies, technologies and societal pref- 2050, in line with efforts to limit global temper-
erences continue as they have done in the recent ature rises to 1.5 degrees Celsius.

Week 37 16•September•2020 www. NEWSBASE .com P5