Can Libya’s Haftar administer captured oilfields?

By Jihad Nasr

TRIPOLI

Last week, Libya’s military strongman Khalifa Haftar captured some of the country’s most lucrative oilfields after clashes with a rival militia.

Shortly afterwards, Haftar decided to hand over the oil ports held by his forces to a rival oil corporation in the east instead of the UN-recognized National Oil Corporation (NOC).

The move has triggered a storm of condemnations inside Libya and concerns among major powers such as the U.S., France and Italy, raising many questions about Haftar’s ability to run the oilfields.

“Local Libyan reactions will do nothing,” Fathi Rahil, a former Libyan oil official, told Anadolu Agency.

He said only the international community and OPEC can prevent the military commander from exporting the Libyan oil.

“If the international community rejected Haftar’s decision, the East-based oil corporation would not be able to strike any oil deals,” he said.

Rahil expects that the international community would refuse to deal with the breakaway oil corporation in the east since “all oil deals were signed by the Tripoli-based NOC”.

He cited the failure of the East-based oil corporation to strike deals in April 2015 “because of the opposition of the international community”.

Oil agreements

Rahil opines that the oil drilling and selling are “co-organized” by the NOC and foreign shareholders.

“All parties are governed by certain measures and domestic and international agreements and contracts,” he said. “Any unexpected malfunction in this system might turn the situation into an international crisis, in which both Libya and foreign shareholders would sustain damage.”

He said Libyan authorities have signed oil agreements with foreign partners and clients.

“These agreements specify the amount of oil and gas exports, ports and loading dates. These must be respected," he said.

Libya holds Africa’s largest crude reserves, but seven years of conflict and violence in the country since the 2011 ouster of strongman Muammar Gaddafi have hobbled production and exports.

The recent bout of violence has cost the country about 450,000 barrels of daily output.

Libya’s national oil production now stands at little over one million bpd.

Interests, not principles

But Marwan Qatesh, a Libyan businessman, believes that the breakaway oil corporation in the east will be able to sell the Libyan oil.

“The international community is governed by interests, not principles or legitimacy,” he told Anadolu Agency.

He said the international community “knows that its interests lie with Haftar, since he controls not only the oil but also vast swathes of territory in the country”.

Qatesh, however, said that if the East-based corporation failed to sell oil, “it might allow buyers to take the crude at below-market prices”.

The Libyan businessman went on to hint that Haftar might have received international assurances before transferring the oilfields to a breakaway corporation in the east.

*Ali Murat Alhas contributed to this story from Ankara