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Facing Battle Logjam, Libyan Rivals Shift to Oil, Financial Strategies

Facing Battle Logjam, Libyan Rivals Shift to Oil, Financial Strategies

Thursday, 2 May, 2019 - 09:30
General Khalifa Haftar, commander in the Libyan National Army (LNA), arrives to attend a meeting for talks over a political deal to help end Libya’s crisis in La Celle-Saint-Cloud near Paris, France, July 25, 2017. REUTERS/Philippe Wojazer

With the frontlines around Libya’s contested capital Tripoli stalemated, the two rival factions are bringing oil and money supplies into the firing line of their battle for power.


Khalifa Haftar, chief of the eastern-based Libyan National Army (LNA) forces which are attacking the city, is putting pressure on state oil firm, the National Oil Company (NOC), and its operations in his fiefdom, diplomats and analysts told Reuters.


In response, the sources said that the internationally-recognized government in Tripoli is limiting his access to hard currency.


The moves mark a new turn in a war which started in early April when Haftar, who is allied to a parallel administration in eastern Libya, mounted a campaign to capture Tripoli.


But LNA fighters have been unable to advance into the city center and costs are piling up as ammunition and other supplies need to be brought in from their home base in Benghazi 1,000 km away. This has prompted Haftar to use oil as a strategic asset.


The LNA, insofar, controls areas surrounding most of Libya’s oil infrastructure but it does not benefit directly from oil and gas sales, which go through NOC in Tripoli managing the day-to-day operations.


In recent days, Haftar has met with two executives working for NOC in the east in his base outside Benghazi.


The first was the chairman of NOC subsidiary AGOCO, which produces a third of Libya’s output. Then Haftar met NOC board member Jadallah al-Awakli.


His office released pictures of the meetings showing the general dressed in military uniform.


Asked by Reuters about his meeting, Awakli said oil operations were benefiting from the security provided by the LNA.


“I congratulate the LNA on its victories,” he said.


Another NOC unit in east Libya, Sirte Oil firm, also expressed support for the Tripoli offensive on its website.


The meetings took place days after the LNA sent a warship to Ras Lanuf port — 600 km from the frontlines. At the same time, NOC said soldiers had entered Es Sider port and seized its airstrip. It condemned what it called a “militarization” of oil facilities but did not name the LNA, which controls the area.


LNA officials denied this and said oil ports work normally.


Diplomats and analysts saw the move as a sign that Haftar wants to remind Tripoli that he can stop oil exports as a way to pressure Chief of Presidential Council Fayez al-Sarraj into a deal to share oil revenues, should he not win on the battlefield.


The LNA last year tried to export oil bypassing NOC via a parallel entity which has some 500 staff on duty.


“NOC is concerned by renewed attempts to divide the corporation,” a spokesman for NOC Tripoli said.


“It is particularly alarmed by evidence of staff coercion and is attempting to clarify the circumstances behind recent statements in support of the armed assault on Tripoli.”


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