We should all support the NOC’s independence, as Glencore and Vitol have done

We should all support the NOC’s independence, as Glencore and Vitol have done

December 16, 2015 - 14:30
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By Sami Redwan 

After the torment of the last four years in Libya, progress towards a power-sharing agreement is a cause for optimism. Without the country’s politicians accepting they must work together for the good of their citizens, there will be no future for our country.

But the strength of this future will depend on our economy and, in the short-term at least, how we make the most of our natural wealth. We need to get our oil industry back on its feet.

This industry has found itself under sustained attack. Sabotage and armed takeovers of oil and gas facilities have sadly been all too common. The result is that we are producing only a fraction of the 1.6 million barrels a day which flowed in 2011 – nowhere near enough to meet our own national energy needs.  

This disastrous collapse in production, combined with falling energy prices, has meant a very difficult period for Libya’s National Oil Company (NOC). But throughout this very challenging time, the Tripoli-based organisation has worked tirelessly in the best interests of the whole country.

Two recent agreements with Vitol and Glencore underline how this work is continuing. Respectively, these deals will provide Libya both with billions of dollars’ worth of fuel to meet the country’s immediate energy needs, and will market crude from the country’s biggest working oil terminal.   

Both agreements are in the long-term interests of the entire country. They have been supported by the US State Department, which has said that continuing transactions with the NOC is legally correct.

But such deals are also being threatened by the Tobruk government, with the House of Representatives (HoR) trying to set up a rival National Oil Company. The HoR’s rejection of the Glencore deal is, as one commentator described it, “exactly the sort of thing that is ruining the economy of Libya.” 

It is behavior which has also been sharply criticised by the respected International Crisis Group, which said “efforts to create parallel institutions to the official ones in Tripoli should cease.” It warned that Tobruk’s attempt to create separate institutions has contributed to an increase in conflict in Libya.

The NOC is fundamental to the success of the country. It plays a serious role in regulating the petroleum sector, and also processes payment for oil and gas from foreign partners. Together with the Central Bank of Libya and the Libyan Investment Authority, it represents up to $130 billion worth of Libya’s assets. The three institutions have always been based in Tripoli and have maintained their operations there.

The continued good management of these assets is vital for the prosperity of Libya’s citizens now and for generations to come. Sunday’s announcement of a tentative power-sharing agreement is reason at last for hope. But this is the time to reinforce the independence of the NOC, not to threaten it. A strong NOC is indispensable to Libya’s future. 

 

Disclaimer:  The views and opinions expressed in this article are those of the writer, and do not necessarily reflect those of the Libya Observer