Libya’s NOC Says Oil Industry Can’t Be Political Bargaining Chip By Bloomberg

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© Bloomberg. An oilrig operated by the Chinese company Zhongyuan Petroleum Exploration Bureau (ZPEB) is seen near Melut, in the Upper Nile, Sudan.

(Bloomberg) — Libya’s National Oil Corporation said it won’t allow the shutdown of output engineered by rival military commander Khalifa Haftar to be used as a bargaining chip, denouncing what it said where “secretive” parallel talks that could endanger oil infrastructure.

The company’s statement Thursday didn’t elaborate on those talks or name the parties involved. But two officials who asked not to be identified told Bloomberg that Deputy Prime Minister Ahmed Maiteeq, who is often at odds with Prime Minister Fayez al-Sarraj, had met one of Khalifa Haftar’s sons in Sochi, Russia last week and agreed to a plan to resume production. They had intended to sign a deal Friday, said the officials, asking not to be named as the talks are confidential.

The officials said the NOC, which is in charge of production and has coordinated an initiative with the U.S. and United Nations to restart oil output, had been kept out of the loop along with members of the government. Maiteeq and a Haftar spokesman did not respond to messages and calls seeking comment.

Haftar, backed by Russian mercenaries, Egypt and the United Arab Emirates, had launched an offensive last year to unseat the internationally recognized government in Tripoli. A counter offensive assisted by Turkey forced him to withdraw to the central Libyan city of Sirte in June, but he remains in control of much of the oil industry and terminals where the NOC say he’s stationed mercenaries.

Wagner Mercenaries

“The NOC regrets the state of affairs that’s led an unauthorized party to politicize the oil sector and use it as a bargaining chip,” the statement said.

NOC Chairman Mustafa Sanalla said mercenaries from the Wagner Group, a private Russian security company, could not be allowed a role in the oil sector, and under the NOC’s plan would have to leave the installations, which would become demilitarized zones.

The NOC had previously warned that the presence of mercenaries and armed groups in the fields and ports could raise the risk of damage to the infrastructure.

“This initiative would guarantee the fair use of resources and oil revenues and their protection to prevent some groups from illegitimately imposing their control for their personal interests,” the statement quoted Sanalla as saying.

Efforts mediated by the U.S. and UN to resume production have repeatedly stalled, with Haftar demanding that a mechanism be put in place to distribute revenues before any re-opening of the industry.

The shutdown has cost Libya more than $9 billion in lost revenues. The U.S. embassy said earlier this week that Haftar had agreed to open the fields by Sept. 12, but the deadline passed without a decision.

©2020 Bloomberg L.P.

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