Rival Governments Dispute Control of Libyan Oil

Rival Governments Dispute Control of Libyan Oil
Mon Oct 20, 2014 09:26:05

Dispute between rival Libyan governments over control of the North African nation’s oil industry is escalating, potentially complicating the production and sale of its most vital resource.

Rebels took control of the Libyan capital Tripoli in August and set up their own government, while the internationally recognized government led by Prime Minister Abdullah al-Thani and parliament fled to the east of the country.

A United Nations-sponsored dialogue between the two sides in the western city of Ghadames failed to resolve their differences last month.

U.N. Secretary-General Ban Ki-moon this month called on a renegade general fighting "Islamist militias" in the east to stop its operations. But fighting has continued there and at least 18 people lost their lives in fierce street battles in the eastern city of Benghazi on Friday.

In a joint statement late Saturday, France, Italy, Germany, the U.K. and the U.S. said they supported the U.N.-sponsored peace talks and a cessation of hostilities. The five governments condemned the violence by group Ansar al-Shariah, voiced concern about the attacks of the renegade general and said they were ready to sanction those threatening Libya’s security.

Libya is normally one of Europe’s largest oil suppliers, but disruptions since the fall of Dictator Moammar Gadhafi in 2011 have reduced its contribution to the continent’s oil supply.

After taking control of the state-owned National Oil Co. building last month, Mashallah al-Zawie, the oil minister of the rebel government, this week set out his first oil policies, including saying he planned to increase fuel prices.

He also made his first international appearance at an Istanbul oil-industry conference, where he called on foreign companies to resume stalled investments in Libya, according to official Libyan news agency Lana. Turkey hasn't had any official reaction to the conference appearance.

Both Libyan leadership sides are now disputing the control of oil-export proceeds, the country’s main source of revenue. Last month, the House of Representatives, the internationally recognized parliament based in the eastern city of Tobruk, dismissed the head of the central bank, Sadiq al-Kabir, which oversees oil revenue.

A spokesman for Mr. al-Thani said his government controls the central bank and said future oil payments will go to accounts the cabinet oversees in the eastern city of Beida, The Wall Street Journal reports.

But officials at NOC and at the central bank subsidiary which receives payments from oil buyers said revenues had continued to flow to its Tripoli-based accounts. Mr. al-Kabir also remains in office, they said.

The confusion over who controls Libyan oil could impede the country’s future production and exports prospects. The Libyan NOC official said oil production stood at 850,000 barrels a day, an increase of 40,000 barrels a day compared with last week, as some fields had increased their output. However, operations at oil fields in eastern Libya have been interrupted by protesters seeking jobs at the facilities.

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