Massive Oil Revenues in May Contradict NOC Chairman’s Anti-LNA Smear Campaign – Al Marsad

Since the Libyan National Army (LNA) launched its campaign to liberate Tripoli from terrorist militias, the Chairman of the National Oil Corporation (NOC), Mustafa Sanalla has conducted a campaign of misinformation against the armed forces claiming that they were exploiting the oil facilities for military purposes and jeopardising Libya’s oil revenue. However, the figures for the oil exports revenues recorded for the month of May show the highest revenues to date by the NOC and seem to go against Sanalla’s accusations against the LNA.

[Libya, 4 July 2019] – Since the decline in oil production that followed the 2011 uprising, the Libyan oil industry has not seen a period of prosperity and stability until the period from mid-2016, the fiscal years 2017 and 2018, and the present period from the beginning of 2019. This has translated into massive revenues for the country despite the fact that the ordinary Libyan citizen has still not seen any significant improvement in their standard of living.

Central Bank of Libya (CBL) 2018 Oil Revenue.

Threat to Libyan oil Installations from Jadran and other terrorists

The prosperity and stability of the oil and gas sector in the country has been achieved after the Libyan National Army (LNA) was able to expel tribal forces that were practicing extortion to obtain salaries, benefits and royalties from local and foreign companies. Furthermore, other armed groups were abusing the name of the  “Oil Installations Guards” and threatening blackmail, closing oil fields and oil export terminals, and at times, even attempting to export or smuggle crude oil in violation of local and international jurisdictions.

The period leading up to the victory of the army over the Islamic State and other armed groups witnessed a state of instability and the interruption of oil production due to the control and attacks of the forces of the UN and US-sanctioned Ibrahim al-Jadhran and his allies the Benghazi Defence Brigades (BDB), also known as Saraya Benghazi, and the Benghazi Revolutionaries Shura Council (BRSC), the Ajdabiya Revolutionaries Shura Council (ARSC), and the Derna Revolutionaries Shura Council (DRSC), on the Oil Crescent region.

After the defeat of these terrorist groups, oil production returned to improved levels and a state of stability and security prevailed in the area in collaboration with a new structure for the Oil Installations Guard led by Brigadier Naji al-Maghrabi. In this new phase the National Oil Corporation (NOC) in Tripoli oversaw production and administrative operations, and the Central Bank of Libya (CBL) collected oil revenues which amounted in the fiscal year 2018 to more than US $22 billion, according to the NOC—skyrocketing from low revenue levels in the period before the army expelled the tribal and armed groups from ports and facilities.

Sanalla’s anti-LNA Campaign

Since the outbreak of fighting and the recent events in Tripoli on 4 April, the Chairman of the NOC, Mustafa Sanalla, orchestrated a local and international propaganda campaign against the Libyan National Army (LNA). Sanalla’s rhetoric wrongly linked the war on Tripoli’s militias to the oil sector in an effort to deliberately provide misinformation. He depicted a bleak picture of the ongoing battle, describing it as a disaster not only for the oil sector, but also for the Libyan economy and the livelihood of the Libyan citizen. He further misled public opinion when, in several statements, he pointed out that the LNA was exploiting the oil facilities for military purposes, in this case the Ras Lanuf oil terminal. The Chairman of the NOC alleged that army officers were interfering in the affairs of the oil facilities’ personnel. However, these allegations were refuted by companies operating in the region, including the Ras Lanuf Oil and Gas Processing Company (RASCO).

RASCO Board Criticises Sanalla’s Allegations of LNA Interference, Says Facilities “Witnessing Unprecedented Stability”

While the Sanalla insists, given his position, on absolute neutrality and against the militarization of oil installations and ports, yet documents and data show that he allowed the planes of the NOC, until last week, to transport the wounded of the Government of National Accord (GNA) forces to Tunis, Istanbul and Rome to receive medical treatment. Sanalla had, however, told Bloomberg that the war forced the airliner of the NOC, Petro Air, to halt many of its flights, affecting crew changes at a number of fields.

Al Marsad had published a detailed report on this on 15 May in its Arabic edition.

وثائق | صنع الله يزج بطيران النفط في حرب طرابلس رغم مناداته إعلامياً بتحييد القطاع عن العمل العسكري

May Oil Revenues Reach Record Levels

According to National Oil Corporation (NOC), May oil exports revenues recorded income of 2.3 billion USD from sales of crude oil and derived products, in addition to taxes and royalties received from concession contracts with a monthly increase of approximately 448 million USD (+24%). It is ironic that the Chairman of the National Oil Corporation (NOC) was stepping up the tone of his speech against the Libyan National Army (LNA) during the month of May, which witnessed the highest revenue. The position of the Chairman of the NOC made the Energy Committee in the House of Representatives accuse him of being a party to the conflict and that he is escalating his anti-LNA statements in order to pave the road for the forces of the Government of National Accord to attack the oil installations and terminals.

Ignoring the Role Played by the LNA in Securing Oil Installations

The NOC said in a statement that revenue figures of May were bolstered by rise in global oil prices, in addition to a busy crude loading schedule at the end of April resulting in cargo receipts both arriving and clearing in May’s revenue statement. In fact, the NOC deliberately ignored in their report the role played by the Libyan National Army (LNA) in providing security for oil installations and securing workers in the oil sector.

A graphic showing production rates at Libyan oil fields. All oil fields are under the security of the Libyan National Army (LNA) with the exception of the Hamada and al-Bouri oil fields. (Source: Al-Ain.com)

In addition, the LNA handed over the facilities to the NOC to be managed at the discretion of the NOC, while the guards of the oil installations protect its facilities. This deliberate omission of the role of the armed forces in securing the oil installations has made some members of the Committee on Energy and Oil in the House of Representatives (HoR) critical of the NOC, and some have even queried publicly to the NOC on who provided protection for oil facilities: was it the LNA or aliens? The reality of the situation indicates that the soldiers stationed on orders issued by their General Command of the LNA, whose soldiers even though they are facing duress in performing their duties yet have not failed to secure these nation’s oil installations with due diligence, competence and patriotism.

In his report, Sanallah said: “These figures showcase the importance of a unified oil sector and its contribution to the economy. Our focus on crude production, despite ongoing security challenges, continues to bring success with over 725 million USD having been spent on exploration and drilling since 2018.” Insisting on his previous statements regarding alleged interference by the Libyan National Army in the work of oil installations and terminals in the country, Sanalla said, “Oil revenues are the lifeblood of the Libyan economy. Any forced interruption of our work will undoubtedly impact our ability to maintain production and finance essential basic services. Despite repeated warnings, corporation facilities and operations are being directly targeted by conflict. NOC condemns all attempts to militarize national energy infrastructure.” Sannalla’s allegations of the militarisation of the oil fields were denied by the management of several oil installations in Libya.

The Politics of Misinformation

Amid accusations of being a party to the conflict, Mustafa Sanalla expressed NOC’s utter rejection of any attempt to drag it into the political conflict. Notwithstanding such claims, the NOC Chairman however has talked on several previous occasions about alleged attempts by both the LNA and the Interim Government to sell oil shipments without legal status or authorization from the NOC. The claims were unfounded and were based on a report published by a British newspaper at a time when the NOC sought advisory services of the former British Ambassador to Libya, Peter Millett. The former British Ambassador is also accused of advising and promoting Sanalla as well as other NOC-related issues in newspapers and decision-making circles in London, including, but not limited to, the Chatham House.

Peter Millett seen in this photo sitting with Mustafa Sanalla at a conference. Siddik al-Kabir and Ahmed Maitiq are also visible on the front row.

Millett’s anti-LNA posts on his official twitter posts have baffled many seasoned Libyan commentators.

The statement issued by the NOC pointed out that the country’s oil revenues are disclosed and transferred to the Libyan Central Bank (CBL), headed by Siddik al-Kabir, on a monthly basis by the NOC. According to the statement, the NOC “is proud to work for all Libyans and serve as a benchmark for transparency amongst Libyan institutions.” The complete audit of CBL’s expenditure which was promised to the Libyan nation has still not materialised. Stephanie Williams, Deputy Special Representative of UNSMIL met with the Governor of the Central Bank of Libya (CBL) Siddik al-Kabir and media reports state they discussed the long overdue international audit of the CBL.

According to a report by Africa Intelligence, the “Big Four financial audit groups all declined to bid for the contract, which they saw as too sensitive. PwC, Ernst & Young, KPMG and Deloitte all took out application files but then, in April, decided not to bid.” They said, “According to our information, UNSMIL has decided therefore to review the terms of its tender call so as to open it up to other bidders.” According to the article, the Tripoli-based CBL is trying to suffocate the LNA financially by stopping “four leading eastern Libyan banks from issuing letters of credit and is subjecting the eastern Libyan commercial banks generally to ever tighter surveillance.”

 

Further Resources:

Plans by Misrata to “Smuggle” Central Bank of Libya Out of Tripoli Revealed