Libya’s Rival NOCs Have United but This Doesn’t Mean Production will Come Back on Line
There has been a lot of buzz about the possibility of lifting force majeur at Ras Lanuf and Sidra. Reuters and Bloomberg have repeated overly optimistic claims that these developments and the merger of the rival NOCs will lead to a restarting of exports from these and other terminals and the move of the joint NOC to Benghazi. All of this is highly unlikely. Although the merger is a victory of the GNA, which has now brought the CBL and NOC firmly under Tripoli’s control, they are not able to use the NOC to remove the snags on production because those snags are non-GNA aligned militias! To clarify this, I was interviewed by Verity Ratcliffe of Interfax, a top Russian gas industry journal.
“The NOC is not moving to Benghazi any time soon,” said Jason Pack, president of Libya-Analysis and a Cambridge University researcher. “It was promised to
be moved to Benghazi in 2013 as part of a compromise with the Federalists and that never happened.”
“[The terms of the deal] can be interpreted by opponents of the GNA as a victory for Tripoli and the GNA,” said Pack. The GNA’s opponents in the east are likely to oppose the deal’s implementation unless different militia groups are brought on board, he added. Implementing the deal on the ground is even more problematic because militias rather than the NOCs control much of Libya’s production. The Zintan Brigades hold areas in the Ghadamis Basin, the Third Force group from Misrata control the Murzuq Basin, and the Sirte and Sarir basins are in the hands of several different groups. “[The deal] will mean nothing because [the NOCs] are not the ones that are holding back the production of oil. It’s not going to make any difference,” one IOC manager in Libya told . “To me, the resolution was nothing.” But although Libya’s oil situation remains murky even after the deal, its gas sector has largely stayed in the hands of the Tripolibased NOC. Gas production is concentrated in the west, and rival groups have steered clear because of practical considerations and the fear of a public backlash.
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