The battle over oil and gas revenues is heating up in Libya wheretwo governments are vying for power, one based in Tripoli and led by Abdelhamid Dbeibah and the other led by Fathi Bachagha, supported by Marshal Khalifa Haftar, the strongman of the East. The government, based in Tripoli, announced on July 13, 2022 the appointment of a new boss at the head of the National Petroleum Company (NOC), the public company in charge of the energy sector, the country’s main source of foreign currency.
Farhat Bengdara, former Governor of the Libyan Central Bank, took office the day after the announcement, without handing over power with Mustapha Sanalla in office since 2014. The latter initially asserted that he would not give up his portfolio. “This institution belongs to all Libyans, not to you”, he launched in a video intervention, addressing the head of the government of Tripoli, Abdelhamid Dbeibah. This was without counting the intervention of an armed group, which surrounded the headquarters of the NOC, on July 14, 2022. Mr. Sanalla had established himself as an interlocutor of choice for the major international companies in the sector. US Ambassador to Tripoli Richard Norland said “deeply concerned” by this change at the head of the company.
“We are following with deep concern the developments surrounding the National Oil Company (NOC), which is vital to the stability and prosperity of Libya”
Richard Norland, United States Ambassador to TripoliAFP
The country has been plunged into chaos since the fall of Muammar Gaddafi’s regime in 2011, undermined by divisions between the East and West of the country. The Haftar camp has been blocking six key oil fields and terminals since mid-April as a means of pressure to dislodge the executive from Tripoli.
Oil production, Libya’s main source of income, is hostage to this political crisis. While world oil and gas production is greatly disrupted by the conflict in Ukraine. Libyan oil is sorely lacking on the market, which worries a large number of countries.
For Hamish Kinnear, of the Verisk Maplecroft analytical institute, this replacement at the head of the NOC “plunges the oil sector (…) into further chaos”. Despite very large oil reserves, the Libyans suffer from incessant power cuts. The infrastructures are deficient, the economy is on the ground and the services failing.
The vital energy sector which, in Gaddafi’s time, made it possible to finance a welfare state, has suffered from the war: squandered oil, damaged or unmaintained infrastructure. In July 2021, major protests took place across the country “against political chaos and the deterioration of living conditions”.