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DMEA COMMENTARY DMEA

Trouble looming in Libya

NOC’s head warns of risks to export terminals’ storage facilities, as Egyptian-

Greek maritime accord steps up territorial disputes

LIBYA MUSTAFA Sanalla, the head of Libya’s National capital Beirut on August 4.
Oil Corp. (NOC), warned last week that his Under such circumstances, he said, Libya’s
WHAT: country was courting disaster. economy would suffer. Without the terminals,
NOC chairman says In a recorded statement, Sanalla raised con- the country will lose its ability to send its hydro-
accidents at Libyan cern about security conditions at the storage carbons to market, and it might not be able to
export terminals might facilities that serve Libya’s export terminals on repair the damage and construct new export
dwarf August 4 explosion the Mediterranean Sea. These depots are facing facilities for years, he explained.
in Beirut. heightened risks now that militia groups have “This will also result in the loss of sales oppor-
seized control of key oil and gas infrastructure, tunities estimated at hundreds of billions of
WHY: he said. dollars that other oil-producing countries will
The country’s storage He also cited “the presence of [foreign] benefit from,” he said. “Furthermore, tens of bil-
facilities are already mercenaries, as well as the military escalation” lions will be needed for reconstruction at a time
under some strain between the Tripoli-based Government of when [the funds] available are limited.”
because of production National Accord (GNA) and forces allied with
slowdowns. Khalifa Haftar’s Libyan National Army (LNA) as Limited options
another source of danger. The damage would not stop at lost sales oppor-
WHAT NEXT: The problem, he explained, is that coastal tunities, either.
Diplomatic disputes storage facilities hold large amounts of crude Libya’s domestic fuel and energy market is
and Egyptian military oil, gas condensate, natural gas and chemicals. relatively small. That is, the country typically
intervention could raise If these inventories are not treated appropriately, exports more hydrocarbons than it consumes.
the risks for Libyan ports. he warned, they have the potential to lead to As a result, if the terminals are not working,
“massive destruction” – that is, an accident even upstream operators have limited options: They
more severe than the explosion that killed 160 can curtail production, or they can try to con-
people and destroyed port facilities in Lebanon’s tinue producing oil and gas at the same rates and

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