Insecurity & protests challenge NOC ambitions - October 15

Over the reporting period, Whispering Bell recorded multiple developments related to Libya’s oil and gas sector. The National Oil Corporation (NOC) signed a letter of intent (LOI) with Italy’s Eni and Britain’s BP to resume oil exploration in Libya in London on 08 Oct. The LOI states that Eni will acquire 42.5% of BP’s Exploration and Production Sharing Agreement (EPSA) in zones A and B (onshore) and C (offshore). While the agreement is a mark of confidence in Libya’s oil and gas sector, insecurity and protests continue to undermine the NOC’s ambitions to raise production and attract more energy companies. .

The NOC warned of a potential closure of the Zawiya refinery in response to a deteriorating security situation. The NOC noted the most recent security incident occurred on 10 Oct when unidentified gunmen attacked the refinery and security personnel. Meanwhile, operators of the Wafa, Abu Attifel, and Al Feel oil fields staged protests on 12 Oct, demanding salary increases. There appears to be no direct threat to production.

Potential disruptions at the Zawiya refinery come amid reports of security threats at the Sharara oil field, which feeds the refinery. According to reports, there was an increase in local militia activity in the Al-Sharara oil field area over the past week, resulting in the evacuation of oil workers from the fields, whilst travel to and from the fields was halted. Production at the field is currently estimated at approximately 220k barrels per day (bpd), down from 300k bpd in Sep 2018. Security concerns related to local militia activity come amid reports the “Fezzan Youth Anger Management”, a civilian movement, is preparing for a potential disruption at the field on 25 Oct.

The security environment in the South is expected to worsen in the short to medium term amid a crackdown on Chadian mercenaries and foreign groups. The formation of previouslyundocumented katibas to combat Chadian kidnappings and criminal activity in the region appears to be part of a growing trend. Meanwhile, tribal tensions could escalate into clashes with little to no warning between Tebu and Tuareg tribesmen.

In the East, the Libyan National Army’s (LNA) arrest of Hisham Ashmway, a highprofile Egyptian extremist militant, will not only contribute to the LNA’s public image and help uncover valuable information to combat terrorism, but will also bring back under the spotlight Egypt’s role in the Libyan dossier ahead of a planned resumption of military unification talks in Nov in Cairo. Unconfirmed reports suggest an Egyptian proposal seeks to bridge differences between military leaders from Misrata and Haftar’s LNA. The reports suggest the proposal would result in a rapprochement between East and West and could eventually lead to a consolidated military structure. Such an outcome, if achieved, would be an important step in reducing the gap between East and West, despite recent controversial statements by the head of the High Council of State (HCS), Khaled Meshri, which would suggest unification remains farfetched.

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