LNA allows exports to resume via Tripoli NOC - July 16

This week was marked by the Libyan National Army’s (LNA) decision to resume exports from the Eastern ports and subsequently hand back control of the Oil Crescent’s four main terminals to the Tripoli-based National Oil Corporation (NOC).

Haftar’s decision came amid reports of the Eastern-based NOC under the Interim government, undertaking measures that were perceived as efforts to potentially market oil independently of the Tripolibased NOC, including the President of the House of Representatives (HoR), Aguila Saleh’s order to form a temporary committee to reform and restructure subsidiaries of the Eastern-based NOC.

However, the Libyan National Army (LNA) issued a statement allowing oil exports to resume through the Eastern ports. The Tripoli-based NOC subsequently announced the lifting of force majeure in the ports of Ras Lanuf, Es Sider, Marsa al Hariga and Az-Zuwaytinah after the facilities were handed over to the corporation on July 11, 2018. Following the lifting of force majeure, the NOC stated that production would resume within hours.

There are two factors that have likely contributed to the decision to allow oil exports to resume. First, there is the possibility of a revenue-sharing agreement struck with the Government of National Accord (GNA) and its measures to increase transparency, including the recent request by Fayez Al-Serraj to form an international committee to review the country’s revenues and transactions, a move welcomed by both central banks. These measures could have been deemed satisfactory by Haftar, which prompted him to allow oil exports to resume.

The second likely factor is international pressure on Haftar to resume oil exports. Despite Haftar’s temporary handover of the Oil Crescent to the Eastern-NOC resulting in support from various local groups, the decision was widely condemned by international actors, noting the Tripoli-based NOC as the legitimate body recognized by the international community and the Organization of the Petroleum Exporting Countries (OPEC).

While the precise details and circumstances that led to the resumption of exports remain unclear, the decision stands as a positive development following significant losses to the Libyan economy. The underlying reasons behind the agreement remain unclear, though the GNA will likely tread more carefully in sharing oil revenues and increasing transaction transparency.

It remains unclear whether or not the agreement presupposes the dismissal of Saddiq Al Kabir, governor of the Tripoli-based Central Bank of Libya (CBL), an outcome favoured by the LNA and East. However, the recent 3+3 meeting in Rome bringing together international and regional actors discussing the corruption allegations against Al Kabir, would suggest Haftar’s push for the dismissal of Al-kabir and the appointment of Mohammed AlShukri could be gaining momentum.

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