Trade | Libya Analysis

Dec
2018

Ban on olive oil exports impact Libya’s “green gold” industry

An article by Arab News published on 27 December highlighted the tensions surrounding olive oil production in Libya. Libyan authorites have decided to halt exports of the “green gold” since 2017, and it remains unclear when exports are to resume. Libya is the 11th largest olive producer in the world, growing around 150 000 tons of the crop annually, but only 20% is turned into oil.

Click here to read the report.

Dec
2018

‘Lost in Trans-nation : Tubu and Other Armed Groups and Smugglers along Libya’s Southern Border’

On 19 December, Jérôme Tubiana and Claudio Gramizzi published for Small Arms Survey’s Security Assessment in North Africa (SANA) in co-production with Human Security Baseline Assessment for Sudan and South Sudan (HSBA) and Conflict Armament Research a very interesting report on Southern Libya. Entitled ‘Lost in Trans-nation : Tubu and Other Armed Groups and Smugglers along Libya’s Southern Border’, the report builds on ‘Tubu Trouble: State and Statelessness in the Chad–Sudan–Libya Triangle’, written by the same authors and published by the Small Arms Survey and Conflict Armament Research in June 2017 (Tubiana and Gramizzi, 2017). The report explores the issue of lawlessness in Southern Libya and provides an analysis of the different groups evolving in this area and their strategies. It is based on field research carried out in Niger in February–March 2017 and April 2018, as well as interviews conducted in Chad in May–June 2017 and January 2018, and in Europe in 2017–18.

The relevance of the report is high given the increasing tensions and violence in Southern Libya and the difficulty to understand the motives of the different actors and the issues at stake in the area. For the authors, Southern Libya is characterized by its ‘lawlessness’ and the presence of ‘autonomous, yet fragmented ethnic militias in control of southern Libya’s border’. The strategic nature of the area then ‘prompts northern Libyan forces as well as the governments of neighboring and European states to pursue alliances with them’, analyse Tubiana and Gramizzi. Among their main findings, the authors note that :

By pressuring Niger to criminalize migrant smuggling and block migrants in or on their way to southern Libya, European states have contributed to a series of destabilizing dynamics. Specifically, their policies have:

aggravated risks for migrants, as trafficking is now concentrated among fewer, more abusive actors, especially in Libya, where migrants from West Africa and elsewhere are systematically kidnapped for ransom, or forced into debt bondage, labour, or prostitution;

caused migrant smugglers to ply more treacherous routes or engage in more dangerous activities, such as drug trafficking, jihadism, and insurgency;

fuelled corruption among Nigerien forces and exacerbated tensions between Niger’s government and its northern communities, which are largely dependent on migrant smuggling for their livelihoods; and empowered Libyan and Sudanese militias.

The authors develop their argument in four sections. First, the authors build the profile of the Tubu militias, situating the Tubu within the broader international political context as well as in Libya’s complex politics and history. Then, the authors focus on Libya’s southern neighbors and the strategies they have developed in the area. Drawing on, they provide an analysis of the strategic area of the Agadez-Fezzan corridor, the route between the Sahel and Libya and a place of important illegal trade and migration. Lastly, the fourth section presents data and analysis of regional weapons flows to support some of the findings discussed in the previous sections.

Click here to read the report.

Dec
2018

The European approach to the MENA

On 16 December, Gulf Times reported about a session of the Doha Forum held on 15 December during which was debated the role of the European Union in the Middle East and North Africa area. at the Doha Forum. The session entitled « « Polarisation in the Middle East and North Africa: What is the European role? » gathered Rt Hon Alistair Burt MP, Minister of State for the Middle East at the Foreign and Commonwealth Office & Minister of State at the Department for International Development, H.E. Sigmar Gabriel, Member of the Bundestag (Parliament), Former Vice Chancellor and Minister of Foreign Affairs, H.E Dr. Mutlaq Al-Qahtani, Special Envoy of the Foreign Minister of the State of Qatar for Counter terrorism and Mediation of Conflict Resolution, Ibrahim Kalin, Special adviser to President Erdogan and the Presidential Spokesperson and Julien Barnes-Dacey (moderator), Director, Middle East and North Africa Programme, European Council on Foreign Relations . according to the report, the opinion conveyed by panellists was that the European Union was not doing enough in these geographical areas. Most particularly, H.E Dr. Mutlaq Al-Qahtani criticized the volatile position of the European Union in the Middle East and North Africa, which varied from one situation to another according to its interests. He also added that the EU could not evade its responsibilities on the issues of migration, refugees and armed conflicts in the Middle East.

Click here to read the report.

Dec
2018

For ordinary Libyan citizens, ‘GNA economic measures serve the rich’

On 4 december, Voice of America published an article on the impacts of the economic reforms designed by the Government of National Accord (GNA), interviewing residents of Tripoli, outlining the difficulties faced by ordinary Libyan citizens. A Libyan quoted in the article argues that the measure implemented by the GNA in September which planned a devaluation of the exchange rate for Libyan Dinars did not do much for the middle and lower class and only served wealthy citizens. The dire economic situation experienced by ordinary citizens in Libya, and most particularly in Tripoli, contrasts with the wealth of the militia and armed groups, which continue to have power over state institutions and authorities and take advantage of the country’s resources.

Click here to read the article.

Nov
2018

Libya Oil Prospects: Political stability needed to secure investments

In its Energy Report of November 2018, Arab Petroleum Investments Corporation (Apicorp) published an overview of the Libyan oil sector, highlighting its vitality but also the urgent need for political stability in order to allow for the development of the sector.

Click here to read the report.

Oct
2018

Oil Conference in Benghazi

On 24 October, the Tripoli National Oil Company (NOC) organized an oil conference in the Eastern city of Benghazi, Reuters reported. The “Benghazi Oil and Gas Exhibition and Forum was the first international business conference held in Benghazi since 2014 and the event represents a significant step in mending the divisions between Western and Eastern Libya and their rival institutions. Tensions had reached a high last June as Eastern General Haftar attempted to seize control of oil infrastructure in Eastern Libya. The Tripoli based NOC stands as the sole legitimate institution in charge of oil infrastructure in the country, however there are persisting complaints in Eastern Libya about resource distribution.

Click here to read the full report.

Oct
2018

The need for broader reforms in Libya

On 8 October, Tim Eaton published with The Chatham House an article about the Government of National Accord (GNA)’s new economic measures. In the article, Eaton reviews the different measures implemented by the GNA, highlighting that they do not constitute a long term solution to solve Libya’s economic crisis. Eaton moves on to argue that such reforms need to go hand in hand with broader structural reforms.

Click here to read more.

Sep
2018

Economy and Industry Minister Nasser al-Dersi discusses the GNA’s Economic Programme for Libya

On 2 September Al Monitor published a phone interview with Libya’s Economy and Industry Minister Nasser al-Dersi in which journalist George Mikhail discussed the Government of National Accord (GNA)’s plan to reform Libya’s economy. The minister describes the different measures envisaged by the GNA, such as amendments to the subsidies system and the reform of the commodity price system. Talking about the obstacles to Libya’s economic reform, al-Dersi notes:

The economic program … is facing obstacles, mainly the division of the Central Bank into two branches: one in Tripoli and one in al-Bayda. In addition, the presence of a parallel interim government in eastern Libya is not helping because it spends out of [a separate] budget and is not transparent about its financial policy. Meanwhile, the internationally recognized GNA [is authorized to deal] with the whole Libyan market without discrimination between east and west. Therefore, the difference in opinion between the GNA and the parallel bodies impedes a financial economic policy that applies to all Libyan territories. We need one government and one central bank to implement comprehensive reform.

Click here to read more.

Aug
2018

Ras Jedir, The Mirror Of Libya’s Malaise

On 21 August, Katherine Pollock and Frederic Wehrey published an article with Canergie Endowment For International Peace on the situation at the Tunisian-Libyan border. In their article, the authors highlight the discrepancy between the policies implemented in the area and the aspirations of the communities located near the border. Pollock and Wehrey argue that while policies mostly focus on enhancing security in the border area, a lasting solution would require a broader approach focusing on the development of economic opportunities for the local communities. The situation at the Tunisian-Libyan border appears to stand as a mirror of Libya’s malaise. Indeed, the approaches designed for the stabilization of the country mostly focus on security and political aspects. However, the stabilization of Libya would require a broader approach with a focus on economic issues, as argued by Libya-Analysis Managing Director Rhiannon Smith and Founder Jason Pack in their latest essay published by Brooking Lawfare’s blog on 19 August.

Jul
2018

The economic nature of the Ras Jedir malaise

On 30 July, Max Gallien published with The Middle East Eye an analysis of the recent tensions between Libya and Tunisia at the Ras Jedir Crossing Point. Ras Jedir has now been closed for more than 10 days following security concerns on the Libyan side and protests on the Tunisian side. According to Gallien, the standoff at the crossing point results from the impacts of smuggling on the two different sides. On the Tunisian side, smuggling creates a vibrant economy, necessary for the survival of marginalized Tunisian populations, while on the Libyan side it contributes to worsening the severe economic crisis. As a result, it has become highly difficult for Libyan and Tunisian authorities to reach an understanding on how to manage the crossing point and smuggling. The situation highlights the importance to create economic alternatives to the smuggling network, Gallien concludes.

Click here to read more.

Jan
2018

Is Libya’s monetary crisis “a crisis of confidence and governance” ?

Jalel Harchaoui has written a thoroughly researched and in-depth article for Lawfare exploring the monetary crisis facing Libya. Detailing the emergence of the crisis after 2011, the author suggests that rather than originating from a lack of physical security it is a “byproduct of a large government bureaucracy, unsustainable levels of welfare spending, and polarized governance”. In discussing a way out of the crisis Harchaoui argues:

Libya’s monetary crisis is a crisis of confidence and governance. This was vividly illustrated by the dinar’s continued slide against the dollar throughout 2017, despite the fact that public expenditures shrank and Libya’s National Oil Company (NOC) managed to double the amount of oil it produced between April and July last year. (The NOC funnels the dollar proceeds from all official sales of hydrocarbons into the CBL in Tripoli.) Irrespective of those fiscal improvements, the dinar has not rallied in the black market in 2017; instead, it has depreciated by 35 percent. Moreover, various electronic-payment applications have failed to make a dent into the banknote-shortage problem. Unity, in conjunction with clear communication and coordinated technocratic execution, are necessary to ameliorate the dinar crisis. Such measures are unlikely to be taken because of the politicized and fragmented nature of Libya’s Central Bank as it stands today. An even greater obstacle is corruption—in customs, law enforcement, politics, and across the banking system itself.

Click here to read the full article.

Nov
2017

Who is to blame for the abuses of migrants in Libya?

Rhiannon Smith appeared on Al-Jazeera’s Inside Story yesterday to discuss the issue of human rights violations against migrants in Libya, who has the responsibility and capacity to deal with the crisis, and what practical solutions might help to solve it. She also highlights the dire situation being faced by many Libyans currently and discusses the impact of Europe’s recent policy to turn migrants back to Libya on the welfare of migrants in the country.

Watch the video below or click here to follow the link.

Nov
2017

Positive Response To Calls For The Central Banks of Libya to Unite

On 22 November, Prime Minister of the Government of National Accord (GNA) Fayez al-Serraj issued a statement calling on the governor of the Central Bank of Libya (CBL) in Tripoli, Sadiq al-Kabir, and the head of the Bayda-based parallel CBL, Ali al-Hibri, to unite the two organisations. He asked them to put their differences aside and meet with him this week to address the liquidity crisis and the devaluation of the Libyan dinar.

Hibri welcomed Serraj’s suggestion to meet in a televised statement, and called for a board meeting in Tripoli. The Tripoli-based CBL then issued a statement agreeing that the banks should be reunified and agreeing to meet with Serraj and Hibri, but setting some preconditions. The Tripoli CBL insisted that an audit of both banks is carried out by an independent expert body of their respective activities so that each bank is held legally responsible for their activities since the 2014 split. The statement also stressed that while it would attend the meeting, it did not believe that reunification would solve all of Libya’s financial problems.

While the Tripoli-based CBL is likely correct in that reunification by itself will not solve the range of economic problems currently stacked against the country, it will be a very valuable step towards having a coherent and cooperative economic policy and therefore could stabilize parts of the economy that are currently vulnerable and could encourage greater international investment and support in the medium term.

Nov
2017

Evidence of people being sold in slave auctions near Tripoli

In a shocking and truly disturbing CNN report, CNN reporters travel to what appears to be a town or suburb near Tripoli and film a real-life slave auction taking place where sub-Saharan Africans are being sold for as little as $400 to buyers who want to use these people for building or farm work without pay and against their will.

Carrying concealed cameras into a property outside the capital of Tripoli last month, we witness a dozen people go “under the hammer” in the space of six or seven minutes.

“Does anybody need a digger? This is a digger, a big strong man, he’ll dig,” the salesman, dressed in camouflage gear, says. “What am I bid, what am I bid?”

Buyers raise their hands as the price rises, “500, 550, 600, 650 …” Within minutes it is all over and the men, utterly resigned to their fate, are being handed over to their new “masters.”

After the auction, we met two of the men who had been sold. They were so traumatized by what they’d been through that they could not speak, and so scared that they were suspicious of everyone they met.

Click here to watch the full video report.

Nov
2017

The Absence of Economic Oversight in Libya

Mohamed Eljarh, a nonresident fellow at the Atlantic Council’s Rafik Hariri Centre for the Middle East, recently gave an interview for the World Politics Review on Libya’s deteriorating economic situation. In the interview Eljarh describes how the absence of a fully functioning central government has impacted economic oversight:

With the ongoing political and institutional divide in Libya, there is no real oversight or regulatory framework for the economy, and the shadow economy is flourishing. The Central Bank, which gets its money from oil and gas revenues and by tapping Libya’s foreign currency reserves, has turned primarily into a national payment system dispensing salaries to the 1.2 million public sector employees, as well as paying for subsidies and different ministries and departments.

After the rupture in the unity government in 2014, Libya has been politically divided between two capitals in Tripoli and Tobruk, with each struggling for control of resources and key state institutions. National debt has been rising, with deficit levels reaching 75 percent in 2015 and falling back to 60 percent in 2016. Libya is burning through its currency reserves, with estimates indicating reserves dropped from $113 billion in 2013 to $58 billion in 2016.

To read the interview in full click here.

Oct
2017

Maltese journalist killed amid accusations of international fuel smuggling

On 16 October, prominent Maltese investigative journalist Daphne Caruana Galizia was killed by a car bomb in Malta. Galzia was investigating fuel smuggling networks and her death has led to an investigation revealing details relating to a fuel smuggling criminal ring operating between Zawiyya, Zuwara, Malta and Italy. Zuwara smuggling kingpin, Fahmi Salim Ben Khalifa, who was arrested by Tripoli’s Special Deterrent Forces (Rada) two months ago, is said to be at the heart of the smuggling racket and is accused of facilitating shipments of smuggled fuel from Zuwara to Malta and Italy in collaboration with others.

Click here to read more.

Oct
2017

Serendipity in the Caucasus: An examination of the major Georgian Qvevri wine varieties

Thanks to the generosity of the Georgian government (who facilitated the research trips), many of the lavishly hospitable winemakers of the Kakheti region, and my colleagues Georgian Backgammon Club, Daria Kholodilina, James Flewellen and Lydia Jabs, my article series “Serendipity in the Caucasus: An examination of the major Georgian Qvevri wine varieties” has been published with the leading online magazine focusing on Eastern European wine, WineSofa. It is the culmination of months of research, tens of books read, and hundreds of bottles drunk. I strongly recommend anyone interest in wine, organic farming, or artisinal products to read it. Here is “PART I: The natural wine renaissance: A journey to the spiritual home of orange wine.” I am trying to set the resurgence of natural wine in the historical context as part of the rise in the quality conscious consumer and the trend for producing food products naturally and returning to ancient methods and flavours. Below is a small excerpt:

The last three decades have witnessed many interconnected revolutions: globalisation, the internet, the fall of communism, the Arab Spring and most recently, the rise of neo-populist movements. These revolutions have been spurred by, and in turn promoted, the ability of the individual to express himself. Linked to these sometimes-disturbing political upheavals has been the beneficial rise of the empowered, cognisant consumer – ushering in the Golden Age of Wine. This silent revolution’s underpinnings have been increased worldwide demand, technological improvements, a movement from bulk to quality and the ability of the consumer to obtain information instantly about thousands of wines with the click of a mouse.

In this everchanging world of iTunes, Tinder and Trump, two countervailing trends are noticeable: hypermodern, technology-influenced developments in food and fashion are simultaneously being opposed by a corresponding obsession with a return to period pieces and authenticity in décor and design. As gourmet restaurants are falling prey to fads of molecular cuisine and every sort of fusion, trends in the wine world are, fortunately, pushing in the other direction.

Oct
2017

Libyan oil stakeholders draft a “Statement of Principles” to safeguard sector

The Libyan National Oil Corporation (NOC) facilitated a two-day consultation involving key domestic stakeholders and international delegates from the EU, US, UK and Russia to discuss how Libya’s oil sector can overcome security and governance challenges. The meeting culminated on 11 October in the publication of a draft “statement of principles” to assist the NOC through the transition period till the establishment of a new Libyan Government as anticipated by the UN backed Libyan Political Agreement. Of significant note is the statement’s non-conciliatory approach on efforts to disrupt oil production, which has cost Libya $126 billion in revenue over the last five years:

Attempts to blockade oil, misappropriate oil and equipment, disrupt or prevent the production or transport of petroleum products are condemned by all parties, and shall be prosecuted to the full extent permitted by Libyan and international law… No concessions or payments will be made to blockaders or disruptors.

To read a draft of the “Statement of Principles” click here.

Oct
2017

UN Security Council Extends Authorization to Intercept Migrant Smuggling Vessels

On 5 October, the UN Security Council for Member States extended its authorization to intercept vessels suspected of being used for the purpose of migrant smuggling and human trafficking through Libya and off its coast until 5 October 2018. The resolution urges cooperation by all actors with Libya’s Government of National Accord, stating that it is:

Mindful of the need to support further efforts to strengthen Libyan border management, considering the difficulties of the Government of National Accord to manage effectively the migratory flows in transit through Libyan territory, and noting its concern for the repercussions of this phenomenon on the stability of Libya and of the Mediterranean region.

Click here to read the full text of the resolution.

Sep
2017

Hunt Goes On For Gaddafi’s Missing Billions

In an article for Commercial Crime International, Paul Cochrane discusses the ongoing search for billions of dollars in assets and funds that were stashed away by the Gaddafi regime over the years. The hunt is still on but with Libya in chaos, there is no effective state to push the investigation and repatriate the cash, while commercial crime in country reaches record levels.

While investigations are ongoing, impetus has dipped since the National Transitional Council (NTC) were trying to gain international legitimacy in the comparatively stable 12 months following Gaddafi’s death. “In the 2011-12 period, American, British and European individuals were promised by the NTC to find the missing cash for a roughly 15 percent stake. Those arrangements were always suspect and have mostly lapsed,” said Jason Pack, executive director of the US-Libya Business Association, in Washington DC.

Click here to read the full article.

Sep
2017

Inside Putin’s Libyan Power Play

In an interesting Foreign Policy article written by Lincoln Pigman and Kyle Ortin, the authors argue that Russia’s growing involvement in Libya, particularly but not exclusively in support of Khalifa Haftar, stems for the most part from a desire to recover Russia’s significant backlog of payments owed under the Qadhafi regime, and to win the political dividends of being able to settle regional crises.

Russia expects to gain three things from its support of Haftar. First, Moscow hopes Haftar will eventually wield enough political power to give Russia pride of place in making economic deals, thus making up for the financial losses — $150 million in profits from construction projects, $3 billion from a Russian Railways contract, up to $3.5 billion in profits from energy deals, and at least $4 billion in arms sales — incurred because of Libyan dictator Muammar al-Qaddafi’s fall. With oil production in Libya at 700,000 barrels per day in January and the country’s so-called oil crescent controlled by Haftar’s forces, energy is an especially lucrative area of cooperation. In July, Russian state oil giant Rosneft began purchasing oil from Libya’s National Oil Corp. as part of a yearlong contract meant to be, in the words of one Russian official, an initial step toward the “renewal of contracts concluded under Qaddafi.”

Click here to read the full article.

Aug
2017

How Libya’s Fezzan Became Europe’s New Border

The International Crisis Group has published a new report entitled ‘How Libya’s Fezzan Became Europe’s New Border’ looks at how the principal gateway into Europe for refugees and migrants runs through the power vacuum in southern Libya’s Fezzan region:

European policymakers increasingly are looking at the Fezzan, Libya’s vast and scarcely populated south west, as their frontier against sub-Saharan African migrants and refugees traveling the Central Mediterranean route to Europe. In 2016, over 160,000 took this route from Libya on makeshift boats; most had entered through this region, which connects the country’s southern border with its coast. Several European countries, chiefly Italy, hope that stabilising the situation in the Fezzan and reviving its economy will help curb migrant flows. The idea has merit, but this will be no easy task and cannot succeed without also addressing the broader crises gripping the country. Any European effort to address governance, economic and security problems in the Fezzan should be coordinated with the internationally recognised government and linked to wider, nationwide initiatives to tackle issues that plague the country as a whole.

Click here to read the full report.

Jun
2017

Libya Oil Production Reaches Over 900,000bpd

On 20 June, the National Oil Corporation (NOC) announced that Libya’s total oil production had reached over 900,000 barrels per day (bpd) for the first time in four years. This is in part due to the resumption of oil production to Zueitina port from Mellitah’s Abu-Tifl oil field and from Wintershall’s two oil fields following the temporary resolution of a dispute between the German company and the NOC. Our sources report that the tanker MYRTOS docked at Ras Lanuf port on 25 June to load 600,000 barrels of crude, while a local Sirte oil company official confirmed that four crude storage tanks have been fully repaired and are back in operation, making a total of 7 operational tanks in the Ras Lanuf tank farm.

The Libya Herald reports that output hit 950,000 bpd at the end of last week, bringing Libya close to NOC Chairman Mustafa Sanallah’s target of 1 million bpd by the end of the month, but that because of maintenance and pipeline leaks, the figure has this week dropped back to an average of 935,000 bpd.

On 20 June, a lone-wolf attacker, allegedly either a Sudanese or Chadian national potentially tied to ISIS (though the group hasn’t taken any official credit for the attempt), detonated a suicide vest at the Sidra gate checkpoint held by Libyan National Army (LNA) fighters. He killed himself and injured another. Heavy artillery including 17 tank shells and an anti-air rocket were later discovered rigged to his vehicle, leading some to believe that the attacker’s initial target may have been the oil facilities rather than LNA fighters.

Jun
2017

UNSMIL Convoy Abducted Then Released Near Zawiyya

On 28 June, a 6 vehicle UNSMIL convoy was ambushed near the city of Zawiyya as it was travelling between Surman and Tripoli. 7 UNSMIL staff including one female, in addition to 12 members of the Libyan diplomatic security, were abducted and taken as hostages by the attacking group. Reports indicate that the UNSMIL staff were released late last night. There were no reports of any injuries.

The attackers belong to a militia led by a local family (Kardamin) which a member of the (Saqr) Tribe. The Kardamin militia and Saqr tribe in general are rivals of the militia status quo controlling Zawiyya port and refinery, and are involved in the profitable fuel smuggling network at the heart of Zawiyya. The UNSMIL hostages were reportedly being held to ransom for the release of three Kardamin militiamen from the jails of RADA (Special Deterrence Force) in Tripoli.

Although this may seem like an isolated incident, other events indicate that Zawiyya may be a locus on instability in the foreseeable future. The arrest of key Islamist commanders from Zawiyya in Saudia Arabia fuelled tensions between local power brokers in Zawiyya and the Government of national Accord (GNA), forcing the GNA to secure the secure their diplomatic release. Another senior wanted figure from Zawiyya has sought refuge in Libya’s consulate in Jeddah.

Although the UNSMIL abduction was carried out by a faction that is more closely affiliated with Haftar’s Libyan National Army (LNA), rather than the Islamist-connected militias that currently hold a lot of power in the city, there may also be reason to believe that LNA loyalists will attempt to fill the new power vacuum emerging in Zawiyya. On 28 June, a group of Zawiyya military and social figures declared their loyalty to Haftar and announced readiness to follow command.

Jun
2017

How to Save Libya From Itself? Protect Its Oil From Its Politics

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.

Click here to read the full article.

Jun
2017

Prince Mohamed al-Senussi Warns Against Lifting Arms Embargo

The Libya Herald reports that Prince Mohamed al-Senussi, the son of the late Crown Prince Hassan El-Rida, has called on the international community not to lift the arms embargo on Libya or the freeze on Libyan Investment Authority (LIA) assets.

In a statement published this week, Senussi noted that the arms embargo imposed by the UN Security Council in 2011 had had limited impact because Libya was already awash with arms and also because regional states have ignored it by providing weapons and ammunition to their proxy militias in the country. He was believed to be referring to Egypt, the UAE, Turkey and Qatar.

As a result of the weapons proliferation, the civil war continues and it has been a “breeding ground” for extremists, he stated. Attacks by militias have also resulted in civilian casualties, he added.

Referring to calls by both the internationally-recognised Government of National Accord head by Faiez Serraj and the rival Beida-based interim government of Abdullah Al-Thinni for an end to the embargo in order to fight terrorism, he said that to do so “would be premature and a disaster inside and outside Libya”.

Click here to read the full article.

May
2017

Boris Johnson Weighs In On Libya

In an article for the Spectator, the British Foreign Secretary Boris Johnson (who is also a former editor of the Spectator) discusses his impressions of Libya from a recent trip to Tripoli covering the hardships faced by migrants and refugees in the country, and the economic and political crisis currently facing Libya. He also uses the article as an opportunity to tout British support and spending on Libya, and bizarrely not only seems surprised that Libya has cafes, hotels and beaches, but also appears to cite tourism as a key facet of Libyan recovery.

If Libya continues in its current condition we risk having a failed state — a haven for terrorists, gun runners and people traffickers — only a few miles from the EU’s southern shores. But if Libya’s leaders seize this moment, the opportunity is immense.

If they can put aside their differences, and stabilise the country, then this place of six million will not only be able to make sensible use of their amazing patrimony of hydrocarbons. They can open up some of the greatest tourist sites in the world, including Leptis Magna — currently too dangerous to visit.

On the streets of Tripoli you can see people beginning to relax, drinking coffee and fizzy drinks outside the cafés. It is now six weeks since a tank round went into one of the big hotels, and spirits are rising. If you shut one eye to the capsized warship in the harbour — sunk by the RAF in 2011 — you can see how it might be a fine resort town.

Click here to read the full article.

May
2017

Payment Not Security is Main Barrier to Foreign Companies Returning to Libya

In an article for the Libya Herald, Sami Zaptia provides an overview of the Libya Investment Summit in Istanbul 9-11 May, including Jason Pack’s speech in his capacity as the Executive Director of the US-Libya Business Association. Pack said that ‘‘Libya has cultural and structural challenges inherited from the Qaddafi era. Its rentier economy dominated by the state-sector undermines the private sector. Its revenues are not being used to create strong institutions and its main institutions such as the NOC and LIA were not part of the formal institutions of power’’. ‘‘Concerns about security, back payments and Letters of Credit being honoured are shared by almost all USLBA members. Solve these and Libya could be back on its feet’’, he suggested.

Click here to read the full article.

May
2017

Will Libya Devalue Its Dinar?

In an article published by al Monitor, Jason Pack and Hedi Sal discuss the current economic crisis in Libya, and the political and financial posturing surrounding the devaluation the Libyan dinar.

Last month, the value of the Libyan dinar fell as low as 9 to the US dollar on the black market, down from 6 dinars, while the ongoing liquidity crisis (over 90% of Libya’s liquidity is estimated to be outside the banking system) means that citizens are unable to withdraw money from their banks and are often not receiving their salaries because their employers simply do not have access to hard cash…

The laws governing the banking sector in Libya authorize the CBL to revise the exchange rate of the dinar against other currencies in response to changes in supply and demand, as well as other economic policy priorities. Although Kabir may be considering devaluing the dinar, he has been reluctant to announce this publicly and appears to have been resisting pressure from the internationally recognized Government of National Accord to do so. In his last press conference on April 23, Kabir said that painful economic decisions are necessary but fell short of outlining any major policy solutions for Libya’s ongoing economic crisis. The AB is also advocating temporary devaluation among other nonfiscal measures to rescue the economy. However, critics of this approach fear that devaluation would achieve nothing, functioning instead as a hidden tax that will create extra social and security costs for Libyan citizens.

Click here to read the full article.

May
2017

Migration and Jihadism in the Sahel

Rhiannon Smith has edited a report on Migration and Jihadism in the Sahel, authored by Dominic MacIver and published by Norwegian think tank Hate Speech International. The report looks at political rhetoric conflating migration across the Mediterranean with the apparent rise of violent jihadism in Europe and asks whether there is a demonstrable link between migrants, jihadist groups and the lucrative smuggling networks which link Africa to Europe, and if so, how can it be managed?

“Jihadist groups and smuggling networks are able to take root due to the power vacuum created by a lack of security, stability and state control in the region. Meanwhile, the population of vulnerable, determined individuals created by such conditions provides the opportunity for illicit profits. As state security forces deteriorate or resort to corruption and repression, jihadist groups may find more malleable recruits in the from of marginalised young men who feel abandoned by their governments. Smugglers, for their part, find customers and middlemen willing to risk it all to seek a better life elsewhere”.

Click here to read the full report.

May
2017

Oil Tankers Seized by Libyan Coastguard Off Zuwara

The battle of wills between various local militias and coastguard units involved in smuggling and counter-smuggling activities around Zuwara continued last week after Libya’s coastguard seized two foreign flagged tankers and detained their crews for allegedly smuggling oil following an hours-long gun battle on Thursday night about 2km off Sidi Said near Zuwara. On 30 April, Al-Jazeera quoted General Ayoub Qassem as saying, “The Libyan coastguard boarded the two tankers, one flying the Ukrainian flag, the Ruta, and the other, the Stark, flying the Congolese flag. The coastguards had monitored them from afar and waited until Friday morning to act,”.

Qassem said the oil traffickers were heavily armed and were supported by small boats. They put up fierce resistance, but the tankers were eventually seized by Libyan authorities “after more than three hours of exchange of fire”. On several occasions, boats with armed men returned and opened fire with Kalashnikovs and heavy machineguns, he said.

After they were overpowered, the two tankers and their crews were taken back to the capital, Tripoli, where they will face prosecution. Among them were 14 Ukrainians from the Ruta and four Turks and two Georgians who were on the Stark, said Qassem. Another three crew members from the Stark were in Zuwara, he said, without giving their nationalities. At the time of the seizure, the Ruta had about 3,330 tonnes of oil in its tanks, while the Stark – which can carry 1,236 tonnes – was about to be loaded when the coastguard arrived.

Click here to read the full article.

May
2017

Sharara and al-Feel Oilfields Restart, Boost Production

Reuters reported on 27 April that the National Oil Corporation (NOC), elders from the city of Zintan, and the Petroleum Facilities Guard (PFG), reached an agreement to reopen the Sharara oil field in western Libya. According to NOC chairman Mustafa Sanalla, the deal is being considered a “final solution” and the NOC will lift the Force Majeure that has been in place on oil exports from both Sharara and al-Feel. Sharara is expected to add 200,000 barrels of production to Libya’s daily output. In addition, the restart of Sharara will allow the restarting of the el-Feel oil field, which is expected to produce 80,000 barrels per day and is dependent on Sharara for power. Bloomberg reported on 30 April that Sharara is currently producing 216,400 barrels a day, while al-Feel is pumping 26,500 and is expected to boost output further. The pipeline feeding oil from the Sharara field to the Zawiyya refinery was closed down earlier this month by Zintani militias who re-initiated a previous blockade at Reyayna.

Click here and here to read more on this topic.

Apr
2017

CBL Governor’s Press Release Offers No New Solutions

A long-awaited press release issued on 23 April by Sadiq al-Kabir, the Governor of the Central Bank of Libya (CBL), failed to provide any new solutions to Libya’s current economic crisis, despite the press release being 8 pages long. Kabir steadfastly refuses to devalue the Libyan dinar – in total opposition to what the Government of National Accord under the leadership of Fayez al-Serraj wants. Kabir insists on a prerequisite package of measures being taken by the weak executive.

Kabir explained that, “The cessation of the natural and positive role of the banking system in the general economy and the decline in credit, financing and investment – are due to the political division, lawlessness, chaos of legislation, the continuation of the closure of Civil Registration Authority.”

He added, “The CBL has submitted files to the Attorney General related to money smuggling of more than LD 4 billion Libyan dinars…that has led to the spread of the black market – negatively impacted the value of the dinar.”

“Foreign currency can not be sold in cash as its supply to Libya has been suspended since December 2013 after the robbery of a shipment to the CBL Sirte branch.”, Kaber repeated.

However, Kaber repeated his long standing and oft-repeated solutions. “The solutions are still possible and need to a strong desire; the end of political division, formation of a united executive and political power, unity of divided institutions, security and activation of judicial authority, an end of armed conflicts, and increase of production and oil and gas exports to their level in 2010.”

Click here to read the Libya Herald report on the press release.

Apr
2017

Libyan Dinar Plummets Against the Dollar

The Libyan dinar crashed to record lows against the US dollar in parallel markets last week in the most rapid devaluation in its history. On 3 April, it had already fallen to 7 LYD to the dollar, but by 10 April it had reached 8.5 LYD to the dollar, sending prices for goods in Libya skyrocketing. The currency free-fall is creating panic across the country, triggering incidences of insecurity and instability.

Click here to read an article by the Libya Herald with more details.

Apr
2017

Sharara Pipeline Blockaded Again

Reuters reports that the pipeline feeding Zawiyya refinery with 200,000 bpd of crude from Repsol’s al-Sharara oil field was blockaded again late on 9 April, slashing total Libyan oil output by a quarter. The pipeline was only open for a week after the latest blockade was lifted on 2 April. The shutdown is a significant blow to the National Oil Corporation (NOC) which promised on 5 April to raise crude production from al-Sharara to its full 300,000 bpd capacity.

Sharara’s production had recovered to 213,000 barrels per day (bpd) by Sunday, when the latest stoppage began. The new blockade led the North African country’s National Oil Corporation (NOC) to declare force majeure on loadings of Sharara crude from the Zawiya export terminal, the oil source said.

Production of oil, gas and condensates have also been interrupted at the western Wafa field, where an armed group closed off pipelines on March 26 near the town of Nalut. The NOC said on Monday it had been losing about $9.8 million in export revenues daily due to that stoppage. Oil output from Wafa had dropped by 4,000 bpd after gas supplies at the field were shut off, but that will rise to 10,400 bpd once oil storage reservoirs are filled, the NOC said. It warned that a longer-term stoppage would carry heavier production risks and financial penalties.

Click here to read the full article.

Apr
2017

Libya’s Oil Output Rebounds as Sharara Reopens

On 3 April, Bloomberg reported that Libya’s oil output had rebounded to around 660,000 pbd after the closure of al-Sharara oil field last week cut the country’s total production to around 500,00bpd. Before this latest disruption, output had been at around 700,000pbd.

Force majeure on the Zawiya export terminal was lifted after pumping resumed Sunday at Sharara, the nation’s biggest oil field, Mustafa Sanalla, chairman of Libya’s state-run National Oil Corp., said Monday by phone. Libya’s overall production is 660,000 barrels a day, according to a person familiar with the matter who isn’t authorized to speak to the media and asked not to be identified. Libya’s output had dropped to about 500,000 barrels a day last week when production was halted at Sharara, according to the same person…

Libya’s NOC had declared force majeure on Sharara crude last Tuesday, a clause which relieves it from delivery obligations due to circumstances outside its control. The same restrictions are in still place for loadings from the Wafa oil field and the Mellitah export terminal, Sanalla said. Sharara’s production resumed Sunday, with output at 160,000 barrels a day, according to the person familiar.

Click here to read the full article.

Mar
2017

Insecurity and Governance Challenges in Southern Libya

In a report for the Carnegie Endowment for International Peace, Frederic Wehrey discusses the sources of insecurity in Libya’s often ignored southern region and outlines some recommendations for Libyan authorities and the international community in order to combat the governance vacuum in the region.

Southern Libya remains a region of endemic instability wracked by communal conflict, a shortage of basic services, rampant smuggling, and fragmented or collapsed institutions. The region has long existed on the periphery of Libya’s politics and international concerns—but that must change. Increasingly, the vacuum of governance in the south has drawn in political actors from northern Libya and outside states. Extremists seeking refuge in the south and migrants being smuggled through the region directly impact the security of Libya, neighboring states like Tunisia, and Europe…

Though conflict and social tensions range far and wide in the south, two locations in particular—Sabha and Ubari—bear watching because of their propensity to draw in other social and political actors from across the region. Both suffer from a witches’ brew of afflictions: they are ethnically and tribally mixed; they suffer institutional weaknesses, especially in the security and justice sectors; and they are situated near major sources of fixed income, whether smuggling routes or oil fields. In addition, they have been the targets of meddling by northern and external actors…

Aside from these two flash points, the southern region faces a number of structural drivers of conflict related to its weak and fractured security sector; the absence of a meaningful local economy, despite the presence of oil fields, and effective border control; and harmful meddling by northern and outside actors. Jihadi militancy is currently a somewhat marginal threat to the south, but it could find greater social purchase among aggrieved tribes or communities or amid a worsening breakdown of governance.

Click here to read the full report.

Mar
2017

LIA’s Ali Shamekh Advocates Inward Investment

Ali Shamekh, the CEO of the Libyan Investment Authority (LIA) as appointed by the House of Representatives and the eastern authorities in August 2016, told Reuters on the sidelines of Global Sovereign Wealth Forum in London on 29 March that he was working to unite the fragmented LIA. The Government of National Accord (GNA) also named a Steering Committee to manage the fund last summer, headed by Ali Mahmoud Hassan Mohamed. However, following a recent Tripoli court ruling freezing the decree that created the GNA’s steering committee, AbdulMagid Breish, who was the chairman of the LIA before it split and claims he retains this position, has moved back into the LIA’s head office in Tripoli.

Shamekh said the fall in production, lower oil prices and instability in Libya meant he was considering investing part of the fund’s capital inside the country. “There are not enough resources or money coming into the country,” he said. “LIA can play a role in directing some of its funds into energy and power generation, both traditional and renewables, oil and gas, and infrastructure – our ports and airports need rehabilitation.”

He said he was considering starting an “incubation and acceleration” fund to back young entrepreneurs with seed capital, particularly in the IT and financial services sectors. The money for this inward investment could come from the $11 billion Libyan Local Investment and Development Fund, a subsidiary of LIA. Shamekh also wants to reopen a London office.

“We are considering having a presence for LIA in London … it’s under evaluation by the board of directors,” he said. “The United Kingdom and London in particular is a focal point of our future strategy overseas.”

Click here to read the full article.

Mar
2017

Libya’s Oil Output Drops to 500,000bpd as Sharara and Wafa Pipelines Remain Shut

The pipeline between the al-Sharara oil field in south-west Libya and Zawiyya oil refinery and port on the coast was blockaded late on 27 March and it has been widely reported that the National Oil Corporation declared force majeure against exports of Sharara crude from Zawiyya, although no official announcement has been posted on the NOC website. Sharara was producing 221,000 bpd before the blockade and NOC Chairman Mustafa Sanallah had recently said he hoped the field would soon reach its total capacity of 330,000 bpd. It is still unclear who is responsible for the blockade if their motivations are financially (demanding payment of wages or similar) or political (as a protest move in the context of deepening divisions across the country).

On 26 March, the gas pipeline from al-Wafa gas field to the Mellitah complex west of Zawiyya was also blockaded by local militias near Nalut who are reportedly demanding the payment of late wages amounting to 10 million Libyan Dinars. On 14 March, the militia had instigated a blockade which only lasted for a few hours, however this new blockade may continue for longer. The blockaded al-Wafa pipeline feeds the al-Ruwais power plant near Nalut and the Zawiyya power plant. As a result, the blockade threatens to knock 500 MW off the electricity grid, according to GECOL, Libya’s state owned electricity provider.

The blockade on Sharara means that Libya’s oil production has now dropped from around 700,000bpd to around 500,000bpd, which could have devastating economic implications. On 29 March, the Libya Herald reported that the dinar passed 7 LYD to the US dollar on the black market, leading members of the Nawasi militia to temporarily close down black market traders in Tripoli in an attempt to prevent the exchange rate from dropping further.

Mar
2017

Sabratha Mayor Says He Cannot Control Local Fuel Smugglers

The Libya Herald reported yesterday that Hassen Dhawadi, the mayor of Sabratha, has said that the Sabratha municipal council cannot stop fuel smuggling. He has called for outside help to combat the trade. Dhawadi said he was angry that fuel smuggling through Sabratha had recently grown significantly. Opportunists had joined regular smugglers, he said, and all were operating on a daily basis.

Click here to read the full article.

Mar
2017

NOC Identifies ‘Illegal Contracts’ as PC Tries to Limit Power of NOC

On 26 March,the NOC issued a statement saying that it had ‘identified a group of individuals abusing the current status of political division in Libya by entering into illegal contracts with unknown or unqualified companies… offering Libyan crude oil for sale at huge discounts below the Official Selling Price (OSP)’. The NOC confirmed the only companies legally contracted the buy Libyan crude and charter shipping tankers from Libyan ports as: ENI, Total, OMV, Repsol, Rosneft, LukOil, Cepsa, Saras, API, Glencore, Socar, Unipec, Vitol, Gunvor, Petraco, and BB Energy. The NOC warned the maritime and crude oil markets that it is not liable for any other contracts and entering into these illegal contracts may lead to serious legal consequences and financial losses.

This followed a joint statement issued by the five permanent members of the UN Security Council on 24 March calling for Libya’s oil industry to remain under the control of the National Oil Corporation (NOC). The statement said, “We underscore that petroleum infrastructure, production, export and revenues belong to all Libyan people and must remain under the exclusive stewardship of the National Oil Corporation.”

In another move that may complicate Libya’s oil industry and policy, on 25 March, the Presidential Council (PC) took the decision to assume power over oil sector policy from the NOC, thereby significantly curtailing NOC Chairman Mustafa Sanallah’s wide-ranging powers which he had wielded temporarily in the past year amidst the political split. Oil sector policy decisions were previously handled by the General National Congress’s (GNC) defunct Ministry of Oil and Gas (MOOG). The PC’s decision effectively strips all oil sector functions from the former MOOG and divides them between the PC and the NOC. Under the new decision (270) issued on 25 March, the PC will have full policy power including endorsing EPSA contracts, licensing concessions, pricing, setting the NOC’s recurrent budget and investment envelope, and setting standards.

Under the terms of the decision, the NOC retains regulatory and operational roles and manages NOC subsidiaries, but now only recommends (rather than decides) the budget, plans and key policy decisions. The NOC issued a follow-up statement on 27 March, saying that the Presidency Council does not have the legal power to change or limit the authorities, duties and responsibilities of the NOC. Sanallah said “I have asked the Presidency Council to withdraw its recent resolution. It has exceeded its authority. Only the House of Representatives, the legislature, has the power to make these changes. This is because NOC’s authorities, responsibilities and duties are based on its Articles of Association which were issued as a law by the legislature under No .24/1970 and No .10/1979.”

Mar
2017

Why Libya’s Oil Revival Hinges on the Fate of Two Ports

A Bloomberg article looking at the important role that Sidra and Ras Lanuf oil ports have in supporting a revival in Libya’s oil production provides a useful background to the current state of play in Libya’s oil industry.

Meanwhile, Reuters reported that the National Oil Corporation (NOC) said on Wednesday that Libya’s oil production had returned to 700,000 barrels per day following a dip during the recent fighting in the Oil Crescent and hoped to reach 800,000 bpd in April and 1.1 million bpd by August 2017.

Mar
2017

Oil Exports Expected to Resume from Sidra & Ras Lanuf

On 20 March, Bloomberg reported that Libya’s oil production is rising again after the Waha oil field feeding Sidra port reopened, with the National Oil Corporation (NOC) saying that staff are returning to Sidra and Ras Lanuf now that the Libyan National Army (LNA) has retaken the facilities and that oil exports are expected to resume within the next week or two. Oil exports had been suspended from these ports since early March due to instability after the Benghazi Defence Brigades (BDB) seized the area and the LNA launched several airstrikes near the ports.

Libya’s eastern oil region is safe now, and companies in the area can resume normal operations related to production and exports, Mustafa El-Zegheid, coordinator of the NOC’s Oil Crescent emergency committee, said.

At least 45 workers and engineers have returned to their jobs at Ras Lanuf and 35 others at Es Sider, El-Zegheid said. Employees at Es Sider have inspected storage tanks and valves, and the facilities are ready to receive crude from the Waha field, which will slowly increase Waha Oil’s production, he said.

Click here to read the full article.

Mar
2017

HoR Rejects Unified NOC

On 15 March, Reuters reported that the House of Representatives’ (HoR) energy committee issued a statement urging the Libyan National Army (LNA) to hand over Sidra and Ras Lanuf oil ports as soon as it had fully secured them, without saying who they should be handed to. The statement from the eastern parliament said it supported a withdrawal from the National Oil Corporation (NOC) unification deal partly because the NOC headquarters had not been moved to Benghazi, as agreed.” We inform everyone of the end of the agreement by which the oil ports were handed over to the so-called unified NOC,” the HoR statement said.

When the LNA seized the oil ports in September 2016 it handed control over the the Tripoli-based NOC which had been unified with the splinter Benghazi-based NOC in July the same year. This meant that although the eastern-based LNA secured the ports, the NOC was able to export crude, with the oil receipts being channelled through the Tripoli-based Central Bank of Libya (CBL).

This may well mean that Haftar is going to try and keep control of the oil ports as well as the oil exports and revenue. This would mark a significant shift away from his previous policy, and highlights how the recent escalation in the Oil Crescent has further deepened Libya’s cleavages. The likely outcome of this move would be the declaration of force majeure at oil ports controlled by the LNA by the Tripoli-based NOC.

Click here to read the full article.

Mar
2017

Russian Security Contractors in Eastern Libya

In an exclusive report, Reuters claims that a force of several dozen armed private security contractors from Russia operated until last month in eastern Libya. Reuters concludes that this is ‘the clearest signal to date that Moscow is prepared to back up its public diplomatic support for Haftar.’

Oleg Krinitsyn, owner of private Russian firm RSB-group, said he sent the contractors to eastern Libya last year and they were pulled out in February having completed their mission.

In an interview with Reuters, he said their task was to remove mines from an industrial facility near the eastern Libyan city of Benghazi, in an area that Haftar’s forces had liberated from Islamist rebels.

He declined to say who hired his firm to provide the contractors, where they were operating or what the industrial facility was. He did not say if the operation had been approved by the U.N.-backed government, which most states view as the sovereign ruler of Libya.

Asked whether the mission had official blessing from Moscow, Krinitsyn said his firm did not work with the Russian defence ministry, but was “consulting” with the Russian foreign ministry.

The contractors did not take part in combat, Krinitsyn said, but they were armed with weapons they obtained in Libya. He declined to specify what type of weapons.

Click here to read the full article.

Feb
2017

Libya Investigates Fuel Smuggling to Malta, Italy, Greece and Cyprus

The Libya Herald reports that on 26 January, Libya’s Attorney General Sadiq al-Sour, who is working with the Presidential Council (PC) and its Government of National Accord (GNA) in Tripoli, launched a wide-ranging investigation into corruption in the oil sector. Al-Sour issued several warrants and travel bans against petrol company executives.

Investigations focus on the smuggling of petrol and other refined oil products from Libya to Italy, Malta, Cyprus and Greece. The trade, according to al-Sour, had cost Libya half a billion dinars. Travel bans have been issued against the chief executives of four fuel distribution companies working with the Tripoli-based Brega Petroleum Marketing Company. They are also under formal investigation.

Separately, al-Sour also announced warrants have been issued against a number of government ministers also suspected of involvement in corruption. However, he did not name them or which government they belong to or state the nature of their supposed illicit activities. His action appears to be in cooperation with the chairman of the National Oil Corporation (NOC), Mustafa Sanalla, who has called for legal action against smugglers.

Click here to read the full article.

Feb
2017

Libya Oil Output Hits 700,000bpd, NOC Lifts Moratorium on Investment

On 26 January, during a conference discussing the reconstruction of Libya held in London, the National Oil Corporation (NOC) chairman Mustafa Sanallah lifted Libya’s self-imposed moratorium on foreign investments in new projects in Libya. Libya’s oil production has also returned to over 700,000 bpd, after the NOC repaired a technical fault at the Sarir oilfield in south-east Libya which had caused production to fall by 60,000 bpd. Sanallah said that Libya aims to produce around 1.3 million bpd of by the end of this year and raise that to 1.6 million bpd by 2022.

Read this Forbes article for more information.

Jan
2017

Libya Says Will Declare Force Majeure at Zawiyya & Zuwara

On 7 January, Reuters reported that the Presidential Council (PC) released a statement saying it will declare force majeure at Zawiyya and Zuwara ports to stop fuel smuggling from them, although the statement gave no details on when the measure would come into effect. This follows accusations by the NOC that militias guarding these ports are engaged in smuggling activities. The Libya Herald also reports that the Misrata Military Council (MMC) has called on the NOC to reconsider its relationship with the Libyan National Army and Field Marshal Khalifa Hafter.

Jan
2017

NOC’s Sanallah Accuses Western PFG of Complicity with Smugglers

The Libya Herald has reported that on 1 January, Mustafa Sanallah , Chairman of Libya’s National Oil Corporation (NOC), singled out the western Petroleum Facilities Guards (PFG) for criticism, accusing them of ‘complicity’ with fuel smugglers in western Libya. Then, at the AGM of the Zawiyya Refinery Compnay, Sanallah actually directly named and criticized the head of the western PFG, Mohamed Kashlaf. Sanallah said that ‘there is a need to prioritize urgent and decisive actions against the organized crime of fuel-smuggling’, adding that the NOC had provided all relevant parties, nationally (in reference to Tunisia) and internationally (in reference to Malta, where much of the smuggled fuel is believed to be transferred and sold on) with all available information on fuel smuggling.

It is well known that the smuggling of fuel, migrants and subsidized goods is rampant in Libya’s coastal region west of Tripoli, and indeed it is a fundamental part of the socio-economic fabric of many of these western communities. As a result, the problem is usually discussed in broad rather than specific terms by Libyan authorities given the scale of the issue and the difficulties inherent in tackling these networks which are embedded in local societies and fiercely defended by the militias that run the operations.

In recent weeks, smuggling activities in western Libya appear to have been ramped up and fuel smuggling has become more visible, in part due to the country’s continuing economic decline and liquidity crisis which make the profits to be made from smuggling networks even more attractive, and in part due to the resumption of crude flows to the Zawiyya refinery after the blockade on the oil pipeline running from al-Sharara and al-Feel oil fields in south-west Libya was lifted.

Sanallah’s attack on the western PFG may be an attempt to put pressure on these forces to stem the high levels of fuel smuggling, especially given that Libya’s coffers are in desperate need of the increased revenue that oil exports from Zawiyya and Mellitah can bring. It was mainly through Sanallah’s negotiations and perseverance with the Zintani blockaders at al-Rayana, combined with local social pressure, that the blockade was lifted. Given there are already rising tensions and an increasing number of incidents occurring between rival militias over control of smuggling networks, as well as anti-smuggling militias attempting to prevent smuggling activities taking place, it seems Sanallah could be applying similar tactics here. However, an alternative motive for directly calling out the western PFG could be to lay the groundwork for LNA forces stationed south of Zawiyya to take control of these ports by weakening the legitimacy of the PFG forces currently guarding the ports.

Dec
2016

Ryayna Valve Blockade Lifted and Sidra Finally Ready to Export

The historic defeat of the Islamic State in Sirte is having many cascading effects. One is Misratan internal tensions, another is increased assertiveness of Haftar, and another is more oil is being brought online. The Petroleum Facilities Guard announced today it has opened the Ryayna valve, essentially lifting the western region blockade on Al-Wafa, Al-Sharara and Al-Fil oilfields. This means gobs and gobs of oil is likely to flow to Zawiyya shortly. Bloomberg has connected this story with the Sidra finally being ready to process crude. Haftar is clearly a winner as he and his allies the Zintanis now seem to control all of Libya’s key oil arteries.

Libya is preparing this week to reopen two of its biggest oil fields and ship the first cargo from its largest export terminal in two years, as the war-torn OPEC state pursues plans to almost double crude output in 2017. Repsol SA-operated Sharara, Libya’s largest oil field, and the El Feel, or Elephant, deposit run by Eni SpA will soon start pumping crude to the Zawiya refinery and the Mellitah energy complex after pipelines reopened Wednesday, Mansur Abdullah, manager of the refinery’s oil movement, said by phone. The two western fields have been closed for more than a year and a half and have a combined output capacity of more than 450,000 barrels a day….

The oil fields of Sharara and El Feel are poised to reopen on Thursday after the NOC reached an agreement with protesters who had been blocking pipelines that connect them with Zawiya refinery and Mellitah complex, a person with direct knowledge of the matter said, asking not to be identified because the issue isn’t public. Zawiya has received instructions to prepare for the imminent reopening of the fields, the refinery’s Abdullah said.

To read the full article click here.

Dec
2016

LNA Says it Defeated Counter Attack in Oil Crescent

Reuters reported that anti-Haftar forces attempted a counter-attack against the oil crescent ports of Sidra and Ras Lanuf early on 7 December. Later the same day, the Libyan National Army (LNA) announced it had recaptured the towns of Ben Jawad and Nufliya from the military force that took them that morning. The LNA said that four of it soldiers were killed and seven wounded in the counter-offensive and that eight of the attackers were also died. The National Oil Corporation (NOC) has not suspended any loadings, but says it is monitoring the situation carefully. One eastern security official said the groups that advanced towards the ports in the Oil Crescent were linked to the jihadi Benghazi Defense Brigades, and also included Ibrahim Jadhran loyalists who were kicked out of the oil crescent ports in September. The Government of National Accord (GNA) has denied any involvement in the counter-attack.

Nov
2016

Haftar in Moscow to Request Arms and Military Support

According to an article in DEBKAfile published today, General Khalifa Haftar visited Moscow over the weekend with a request for Russian arms and military support for his Libyan National Army (LNA) forces. Putin is reportedly offering Hafter’s army jet fighters, attack helicopters, armoured vehicles and assorted missiles as well as air support for fighting the Islamic State. The article claims that:

President Vladimir Putin began to envision a second Mediterranean base on the coast of Benghazi, twin to Hmeimim in Syria’s Latakia. This one would accommodate Russian naval as well as air units and be located 700km from Europe…. At all events, Russian planes in Hmeimim are capable of covering the 1,500km distance to Libya, while the Russian carrier Admiral Kusnetzev is anchored not far away, off Syria’s Mediterranean shore. Both are therefore available for operations in support of the Libyan general.

Click here to read the full article.

Nov
2016

NOC’s Sanallah Says Libya Will Not Be Part of OPEC Cuts

Yesterday, the Libya Herald reported that Mustafa Sanallah, the head of Libya’s National Oil Corporation, told the Austrian-Arab Forum in Vienna that the dire state of Libya’s economy means that it cannot afford to be part of OPEC production cuts. OPEC members are due to meet on Wednesday in Vienna to agree production cuts. Libya’s oil production has doubled since September, but is still a long way short of the 900,000 bpd target Sanallah set for the end of the year.

Oct
2016

Crisis Talks on Libyan Economy Held in London

The Guardian reports that John Kerry and Boris Johnson are hosting crisis talks in London today with Libyan officials, including GNA prime minister Fayez al-Serraj and CBL Chairman Sadek al-Kabir. The focus of the talks is Libya’s deteriorating economy.

Oct
2016

Goldman’s Libya Derivatives Were Fine

Bloomberg columnist Matt Levine highlights the complexities of derivatives trades and discusses some of the controversial, complex and at times downright bizarre revelations to come out of the Libyan Investment Authority (LIA) – Goldman Sachs trial, which concluded earlier this month in a victory for Goldman. He concludes:

After the financial crisis, it is no longer entirely satisfying to say that customers dealing with banks should look out for themselves, and that banks have no responsibility for protecting customers from themselves. But, in the U.K. at least, it is still the law.

Oct
2016

Why Goldman Was Bound to Win This Suit Over LIA

On October 14, 2016, the suit between the Libyan Investment Authority and Goldman Sachs was finally decided. It was a sad day for Libya as the LIA’s claims were comprehensively defeated and debunked. However, this might well be because the Libyans took the completely wrong approach to the lawsuit. Rather than correctly saying that Goldman was complicit in Qadhafi era corrupt practices which they certainly were, the Libyans alleged that they were babes in the arms and that they got hoodwinked by crafty, evil Goldman Sachs. The later narrative doesn’t hold up as I commented for Bloomberg News. The former narrative is almost certainly true and Goldman and other firms probably broke the Foreign Non-Corrupt Practices act and if they had been sued in this vein, Goldman would likely have lost.

As readers of my blog know, I firmly support the Western engagement with Qadhafi from 2003-10. It got rid of his WMD and brought the internet to Libya and gave the country a chance for reform. I have defended engagement prominently in The Spectator. Yes, engagement had its flaws. Yes some bad wall street firms like Goldman (who i have no love lost for ) benefited from it. I believe in engagement with all regimes. North Korea, Iran, you name it. That is my politics. It is the Libyans fault 100% if they did bad trades. If Goldman tricked them saying they were sure to make money, well caveat emptor. So long as Goldman didn’t do trades that were different than the Libyans agreed to than Goldman is not at fault. The Libyans approved the trades and not only were they not babes in the woods. Furthermore, I have ever reason to believe that corrupt individuals like Mustafa Zarti did the trades knowing they WOULD LOSE MONEY ON PURPOSE!!!

As for Goldman’s complicity in Zarti’s and Saif’s and others losing Libya’s sovereign wealth. Well, there are no laws against selling you bad trades and there shouldn’t be. That doesn’t make Goldman angels. they are sleazy bastards and I wanted Bernie to win to break up the big banks but that is a domestic American political issue. On the world stage, the Libyans have every right both now and then to squander their money. And although now Libya doesn’t have sovereignty enough to manage its own assets. In the old days, Qadhafi most certainly had sovereignty and no matter how corrupt his officials were they had every right for them to lose Libya’s wealth. It is not illegal for them to do so. Do you know the implications to global finance it would have had if the LIA won after making the argument it ded? All of a sudden crazy countries and firms could sue any investment bank if they ever lost money saying they didn’t know what they were investing in… the result would be chaos. No one would be able to do speculative business for fear of getting sued. I stand by this. I stand by capitalism and free trade global. But it is a sad day as it should have been former Qadhafi officials who got locked up and were made to pay for their corrupt practices but that is not the court case that Breish and Baruni brought before the court in London. These corrupt former regime officials tried to exonerate their neligence by blaming their losing the Libyan people’s money on outsiders when sadly it is actually completely and totally their own fault.

Oct
2016

How Libya Could Undermine OPEC’s Plans

In an article for Politico Europe, Jason Pack and Rhiannon Smith discuss how Libya’s slowly but steadily rising oil production could undermine OPEC’s recent agreement to cut its members’ outputs, and how this could actually be beneficial for Southern Europe’s struggling oil-dependent economies. They conclude:

The NOC has said it plans to increase production and exports to 900,000 barrels per day by the end of the year, and while Libyan estimations of future production should usually be taken with a grain of salt, this time, it seems completely possible.

To be sure, production figures could once again plunge as quickly as they rose. And yet, there’s reason to imagine that it will not. With the Islamic State and Jadhran’s forces marginalized, for the first time since 2014, the country’s main political players are all in a position to benefit from the flowing oil. And that’s good news for Europe — especially for the crisis-mired southern countries, which are largely dependent on the type of sweet crude that Libya exports.

Click here to read the full article.

Oct
2016

World Bank Report Says Libyan Economy Near Collapse

The World Bank has published a report entitled ‘Libya’s Economic Outlook – October 2016’ which warns that due to low oil production, political instability and ongoing conflict, Libya’s economy is in dire straits.

The Libyan economy is near collapse as political stalemate and civil conflict prevent it from fully exploiting its sole natural resource: oil. With oil production just a fifth of potential, revenues have plummeted, pushing fiscal and current account deficits to record highs. With the dinar rapidly losing value, inflation has accelerated, further eroding real incomes. In addition to near-term challenges of macroeconomic and social/political stability, medium-term challenges include rebuilding infrastructure and economic diversification for job creation and inclusive growth.

Click here to read the full report.

Oct
2016

Libyan Oil Production Hits 500,000 bpd

Reuters reports that Libya’s oil production has now hit 500,000 bpd, nearly double what it was 2 months ago, and adds that NOC Chairman Mustafa Sanalla has said he hopes to raise output as high as 900,000 bpd by the end of the year.

The increase followed a rise in production at the Sarir field to around 200,000 bpd, and as production at Nafoura reached 29,000 bpd, AGOCO spokesman Omran al-Zwai said. He said AGOCO could reach its year-end target of 350,000 bpd if the Bayda field came back on line.

Oct
2016

Och-Ziff Found Guilty of Bribing LIA

The Libya Herald reports that the US Securities and Exchanged Commission (SEC) has ruled that investment mandates secured by US hedge fund Och-Ziff with the Libyan Investment Authority in 2007 were obtained through bribery.

This week the firm was told to pay $413 million after it pleaded guilty to bribery in Libya as well as Chad, the Democratic Republic of Congo, Guinea and Niger.

The SEC report into the Libyan payola does not name names but says the US firm paid $3.7 million to win the business. It seems clear from its findings that Saif Qadaffi received a share of the bribe along with Abdullah Senussi, the Muammar Qadaffi’s security chief.

Click here to read the full article

Sep
2016

Controlling Libya’s Wealth: Haftar’s Long Game

Jason Pack writes an opinion piece for Al-Monitor discussing the flow of oil, and more importantly oil revenues, in Libya since Haftar seized the oil crescent ports earlier this month. He argues that Haftar is allowing the revenues to flow as part of his ‘long game’ to gain legitimacy and leverage within Libya and to strengthen his external alliances with allies such as Egypt and Russia.

In short, Hifter’s ambitions reach far beyond gaining access to specific amounts of Central Bank of Libya funding. He appears to be playing the long game; progressively building up legitimacy, leverage and influence. Since the start of the uprisings against Libyan leader Col. Moammar Gadhafi, Hifter has tried via various tactics and ruses to become Libya’s strongman. It is in this light that we must interpret his current military maneuver in the oil crescent and generosity toward the GNA. He clearly hopes to finally acquire a strong enough position to seize the leadership of Libya for himself, whether through political negotiations or more likely through military force.

Click here to read the whole article.

Sep
2016

NOC Plans to Load Oil at Ras Lanuf and Lift Force Majeure

The Wall Street Journal reports that the NOC plans to load an oil tanker from the long-closed Ras Lanuf port, and lift force majeure on all oil crescent ports. However it remains to be seen whether the Presidential Council will release funds to the NOC to make the necessary repairs given Haftar’s Libyan National Army (LNA) now controls the ports.

Libya’s National Oil Co. is planning to load a tanker full of 600,000 barrels of crude from the port, Ras Lanuf, said oil officials, whose account was supported by ship-tracking websites. The company has yet to decide if the oil will be exported or refined domestically at another port, the officials said….

Libyan oil officials said Wednesday that force majeure—a legal clause than bans shipments from oil ports—was being lifted from these four ports and exports would restart imminently from Zueitina and Brega.

The country could raise production to 600,000 barrels a day within weeks from around 290,000 barrels a day currently if the necessary funds were made available by the central government, said National Oil Co. Chairman Mustafa Sanallah, who visited Zueitina on Wednesday.

The oil officials’ plans to quickly begin loading oil at Ras Lanuf are politically sensitive in Libya.

Click here to read full article.

Aug
2016

Poor Countries Need Market Access, Not “Assistance”

We at EyeOnISISinLibya and Libya-Analysis are free-traders. We think it would serve Libya and other countries to cut the red tape. We believe that cutting down tariff barriers will make the world a more prosperous and fairer place. Nate Mason, a partner at Eye on ISIS and President of Mason Trade Strategy LLC, is a deep thinker about trade. He has published a fascinating article about the hypocrisy and inefficiencies of wealthy countries’ development and trade policies.

In the current American political environment, free trade is widely condemned by both Democrats and Republicans in favor of international economic development work of one kind or another. Pretending free trade and international economic development are separate issues facilitates a self-serving narrative that allows Americans to feel good about themselves while maintaining exploitative and self-defeating policies toward poor countries…..

The governments of wealthy countries routinely impose and maintain prohibitive tariffs on products from poor countries and escalate those tariffs the more value is added (a higher EU tariff on roasted coffee than on raw beans, for example). This interferes with the ability of businesses in poor countries to move up the value chain. Of course, they do this to protect their own farmers, textile workers, and coffee roasters from competition. In lieu of market access, technical assistance is ironically provided to help businesses move up the same value chains that protectionist trade policies are expressly designed to make unattractive.

To read the whole article click here.

Viewing posts from: Trade

Recent Posts

Site Navigation

Ban on olive oil exports impact Libya’s “green gold” industry

‘Lost in Trans-nation : Tubu and Other Armed Groups and Smugglers along Libya’s Southern Border’

The European approach to the MENA

For ordinary Libyan citizens, ‘GNA economic measures serve the rich’

Libya Oil Prospects: Political stability needed to secure investments

Oil Conference in Benghazi

The need for broader reforms in Libya

Economy and Industry Minister Nasser al-Dersi discusses the GNA’s Economic Programme for Libya

Ras Jedir, The Mirror Of Libya’s Malaise

The economic nature of the Ras Jedir malaise

Is Libya’s monetary crisis “a crisis of confidence and governance” ?

Who is to blame for the abuses of migrants in Libya?

Positive Response To Calls For The Central Banks of Libya to Unite

Evidence of people being sold in slave auctions near Tripoli

The Absence of Economic Oversight in Libya

Maltese journalist killed amid accusations of international fuel smuggling

Serendipity in the Caucasus: An examination of the major Georgian Qvevri wine varieties

Libyan oil stakeholders draft a “Statement of Principles” to safeguard sector

UN Security Council Extends Authorization to Intercept Migrant Smuggling Vessels

Hunt Goes On For Gaddafi’s Missing Billions

Inside Putin’s Libyan Power Play

How Libya’s Fezzan Became Europe’s New Border

Libya Oil Production Reaches Over 900,000bpd

UNSMIL Convoy Abducted Then Released Near Zawiyya

How to Save Libya From Itself? Protect Its Oil From Its Politics

Prince Mohamed al-Senussi Warns Against Lifting Arms Embargo

Boris Johnson Weighs In On Libya

Payment Not Security is Main Barrier to Foreign Companies Returning to Libya

Will Libya Devalue Its Dinar?

Migration and Jihadism in the Sahel

Oil Tankers Seized by Libyan Coastguard Off Zuwara

Sharara and al-Feel Oilfields Restart, Boost Production

CBL Governor’s Press Release Offers No New Solutions

Libyan Dinar Plummets Against the Dollar

Sharara Pipeline Blockaded Again

Libya’s Oil Output Rebounds as Sharara Reopens

Insecurity and Governance Challenges in Southern Libya

LIA’s Ali Shamekh Advocates Inward Investment

Libya’s Oil Output Drops to 500,000bpd as Sharara and Wafa Pipelines Remain Shut

Sabratha Mayor Says He Cannot Control Local Fuel Smugglers

NOC Identifies ‘Illegal Contracts’ as PC Tries to Limit Power of NOC

Why Libya’s Oil Revival Hinges on the Fate of Two Ports

Oil Exports Expected to Resume from Sidra & Ras Lanuf

HoR Rejects Unified NOC

Russian Security Contractors in Eastern Libya

Libya Investigates Fuel Smuggling to Malta, Italy, Greece and Cyprus

Libya Oil Output Hits 700,000bpd, NOC Lifts Moratorium on Investment

Libya Says Will Declare Force Majeure at Zawiyya & Zuwara

NOC’s Sanallah Accuses Western PFG of Complicity with Smugglers

Ryayna Valve Blockade Lifted and Sidra Finally Ready to Export

LNA Says it Defeated Counter Attack in Oil Crescent

Haftar in Moscow to Request Arms and Military Support

NOC’s Sanallah Says Libya Will Not Be Part of OPEC Cuts

Crisis Talks on Libyan Economy Held in London

Goldman’s Libya Derivatives Were Fine

Why Goldman Was Bound to Win This Suit Over LIA

How Libya Could Undermine OPEC’s Plans

World Bank Report Says Libyan Economy Near Collapse

Libyan Oil Production Hits 500,000 bpd

Och-Ziff Found Guilty of Bribing LIA

Controlling Libya’s Wealth: Haftar’s Long Game

NOC Plans to Load Oil at Ras Lanuf and Lift Force Majeure

Poor Countries Need Market Access, Not “Assistance”

Archives

Categories