Page 6 - DMEA Week 50 2021

DMEA COMMENTARY DMEA

Libyan contradictions

and contraindications

Libya appears to be drawing interest from several major IOCs, but the impending
presidential election could spark enough turmoil to prevent a new wave of investment.

AFRICA THERE has been some good news coming out of on December 24, in line with the terms of the
Libya lately, in that several international oil com- ceasefire agreement accepted by the factions
panies (IOCs) have shown interest in new pro- within the GNU. However, there have been calls
WHAT: jects or in expanding existing schemes to include for a delay, as legal disputes have prevented the
Following TotalEnergies’ natural gas, gas-to-power and renewable energy national election commission from finalising
new agreements on Waha components, as well as crude oil production and its list of candidates for the presidency. (One of
and Eni’s show of interest exports. these disputes concerned Saif al-Islam Qaddafi,
in Libya’s domestic gas TotalEnergies (France), for example, revealed one of Moammar Qaddafi’s sons, whose can-
market, Shell is rumoured late last month that it had signed a package of didacy was recently reinstated after first being
to be considering a new agreements worth more than $2bn with the Gov- disqualified.)
project. ernment of National Unity (GNU). Even if there were no such disputes, the race
Under those agreements, the French major is not likely to have a clear winner. To date, more
WHY: will increase its equity stake in the Waha oilfields than 100 people have announced plans to run
The investment climate is from 16.33% to 20.41%, raise the fields’ produc- for the presidency, and two of the best-known
looking shaky in the run- tion capacity, install a gas gathering network in candidates are quite controversial. For instance,
up to the December 24 order to reduce associated gas flaring, establish Prime Minister Abdul Hamid Dbeibah has put
presidential election. 500 MW of solar generating capacity and pro- his name forward, even though he pledged when
vide electric power to local communities and taking the helm of the GNU that he would not
WHAT NEXT: industrial facilities. try for the presidency. Khalifa Haftar, the leader
Pre- and post-election Around the same time, Eni (Italy) indicated of the Libyan National Army (LNA), is also
unrest could lead IOCs to that it saw Libya itself as a growth market for standing for election, although he has no hope of
postpone projects. gas. Speaking at the Libya Energy & Economic securing enough votes outside Libya’s southern
Summit in Tripoli on November 22, the Italian and eastern regions to gain control of the entire
major’s COO Alessandro Puliti said: “In the past country.
years, we have [shifted] increasing shares of gas Under these circumstances, Libya may expe-
production from export to the domestic market rience violent unrest in the run-up to the elec-
to fulfil domestic market demand. This clearly tions. There are multiple reasons why this might
demonstrates the utmost attention we have paid happen. Armed factions could start shooting at
to the economic and industrial development of each other again, as was the case in the south-
Libya.” ern city of Sabha on December 13, when local
Since then, Reuters has reported that security forces found themselves in a firefight
UK-based Shell (formerly Royal Dutch Shell) with LNA fighters. Popular discontent over
was considering a return to the North African postponement of the elections, failure to finalise
state. Two sources told the news agency at the the presidential candidate list or last-minute dis-
end of November that the international major qualification of candidates could lead to demon-
was looking into proposals for coming back to strations and clashes with security forces.
Libya to develop oil, gas and solar resources. The
sources did not say whether Shell was eyeing Problems past, present and future
any specific projects, but Reuters noted that the Martin Sherriff, head of the Middle East-North
company had exited Libya about 10 years ago Africa (MENA) group at Welligence Energy
in response to the turmoil that erupted follow- Analytics, highlighted some of these problems
ing the ouster of the country’s long-time ruler, in a message to NewsBase.
Moammar Qaddafi. “Planned elections in the country are close to
collapse, which could shatter hopes [of] re-unit-
Political challenges ing the divided country,” he wrote. “Further
At the same time, these positive developments conflict could reignite following the ceasefire in
have been paired with uneasy speculation about 2020, as rival factions have accused each other
Libya’s upcoming presidential elections. of bribing and intimidating officials to reinstate
The country is scheduled to hold the vote their candidates, which include high-profile

P6 www. NEWSBASE .com Week 50 16•December•2021