In an article for the New York Times last week, the Chairman of Libya's National Oil Corporation (NOC) Mustafa Sanallah argues that since the revolution of 2011, the country’s oil and gas resources have been held hostage to both its fractious politics and power struggles in the Middle East, and that the NOC has also had to contend with assaults on its independence as a decision-making body.
Under Col. Muammar el-Qaddafi, Libya was a classic petrostate, and it remains that today. Absolute dependence on oil and gas, which account for 95 percent of export revenues, has helped turn political infighting into a winner-take-all contest.
The Petroleum Facilities Guard, which is charged with protecting Libya’s oil infrastructure, has devolved into local fiefs. Between 2013 and last September, these blockaded nearly all of Libya’s main oil ports and tried to leverage that chokehold into ransom money and political power. That cost the country over $120 billion in lost revenues and most of its financial reserves. The guard’s rivals and the Islamic State have attacked the ports, causing billions in damage.
Sanallah concludes that:
Ring-fencing Libya’s oil sector from local and international rivalries would have an enormous impact on the country’s prospects, both economic and political. It would de-escalate the current internal conflict. It would unlock the potential of oil as a driver of national regeneration. It would, in short, allow the country’s resources to be put to work for their rightful beneficiaries: the people of Libya.
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