Libya’s rival oil corporations merge amid disagreements

Libya Channel

 

The two rival managements of Libya’s National Oil Corporation said Saturday that they reached an agreement to reunite and work as one institution in order to normalize oil exports and ease economic hardship. But conflicting views on how to implement the deal suggest problems ahead.

 

According to the deal Mustafa Sanallah – head of the Tripoli-based NOC – will be the overall chairman, while his counterpart in the east – Naji al-Maghrabi – will be member of the management board. The main element of the deal is that the NOC headquarters will be moved to Benghazi, where the corporation used to be based in the King’s era.

 

“We made a strategic choice to put our divisions behind us and to unify and integrate [the] NOC…,” Al-Maghrabi said after a meeting with Sanallah in Ankara on Saturday. “There is no other way forward. This is for the good of Libya,” he added.

 

“This agreement will send a very strong signal to the Libyan people and to the international community that the Presidency Council is able to deliver consensus and reconciliation. I’m sure it will now build on this success to bring unity and stability to other government institutions”, Mustafa Sanallah said, referring to the Presidency Council of the Government of National Accord, Libya’s unity government that arrived in Tripoli at the end of March.

 

Along with the Central Bank of Libya, the NOC split in 2014 after armed coalition Libya Dawn pushed the elected parliament – the House of Representatives – out of the capital and resurrected the previous parliament – the General National Congress. Questioning the neutrality of institutions remaining in Tripoli, the HoR’s Interim Government in early 2015 formed a new NOC management based in the eastern town of Tobruk. It then tried to convince foreign buyers and partners to suspend relations with the Tripoli NOC and to see oil independently from existing channels, but these attempts largely failed.

 

The impetus for the merger had come from GNA prime minister Faiez Serraj with HoR president Agila Saleh approving from his side, Sanallah said in an interview. He explained that he had held a number of meetings with his counterpart Al-Maghrabi and that the two signed an MoU one month ago.

Per the agreement, the two sides recognize the GNA Presidency Council as highest executive authority and the HoR as highest legislative authority, according to a statement posted on the Tripoli NOC’s website.

The unified NOC will submit periodic reports to committees established by GNA and HoR, the statement said, adding that the two sides also agreed to a joint budget for this year.

 

The agreement seems to leave some open questions regarding the relocation of the NOC headquarters – a sticking point in east-west relations in the past. “The headquarters of NOC, as was ordered by the government in 2013, will be moved to Benghazi when security and infrastructure permit”, Sanallah said. The statement the Tripoli NOC posted mentions the possibility of holding periodic board meetings in Benghazi until security conditions allow a permanent return.

 

But Naji al-Maghrabi contradicted this on Libya Channel’s Newsroom Sunday evening. “Talk that the NOC will be based in Tripoli and only hold periodic meetings in #Benghazi is untrue”, he said. Al-Maghrabi also backed off from the alleged recognition of the GNA’s authority. “We try to stay away from politics but we cannot work with any government that has not been approved by the HoR”, he said, in reference to the unity government. “The NOC agreement will not be effective unless the organization’s main headquarters is transferred to Benghazi”, he clarified.

 

There is pressure from decision-makers in East Libya not to tacitly endorse the GNA through this deal before the HoR has decided on its fate.

 

Many in the east are also tired of hearing promises concerning the relocation of national institutions to Benghazi and want to see concrete steps now.

 

We will stand against any agreement that does not clearly state that NOC headquarters are in Benghazi”, said Aissa al-Areibi – HoR member and head of parliament’s energy committee.

He also said that the agreement needed to involve the energy committee, as well as take into account the equitable distribution of oil.

 

Demands for a more equitable distribution of oil revenue are central to east-west relations. But Sanallah said that deciding on a precise split was beyond the scope of the present agreement and the competence of either him or Al-Maghrabi to negotiate.

“ [The] NOC’s sole concerns are the optimal management, production and sale of Libya’s hydrocarbon resources, not deciding who gets what from the national budget”, Sanallah said.

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