Mon. Sep 16th, 2024

The issue of the “partial closure” that surfaced on the Libyan event seemed to be a passing case, as the Oil Facilities Guard, who used this measure to collect their financial rights, reopened the fields and lines, but at the same time they again raised the paradox of Libyan oil at the level of the crisis that the country is experiencing.

The internal relations are now subject to various tensions, although the Government of National Unity in Tripoli did not comment on this event, and the Prime Minister only issued a decision to determine the salaries of the members of the Petroleum Facilities Guard in accordance with the unified salary scale for members of the Libyan army, but at the same time, the stumbling in the process of stabilizing the oil flow affects the overall political and economic realities in Libya.

In practice, Libya produces 1.2 million barrels of crude oil per day, but this figure was subject to various changes, as it fell from about 1.7 million barrels per day in 2010 to 7 thousand barrels per day in August 2011, and then entered a slow recovery phase to reach about 1.5 million barrels per day in 2012, before declining again due to armed conflicts, sanctions, and power cuts, and in 2020 oil production in Libya averaged about 300 thousand barrels. Every day, after 2021, with the lifting of the blockade on export ports, oil production has returned to a rate close to what it was before the outbreak of unrest in 2011.

The main aspect raised by the recent partial closure at the end of February is related to the effects of instability in oil production in general and its effects on relations within the conflicting parties, and a set of basic indicators can be seen in this matter:

 

1 . Libya is the second largest oil reserve in Africa with about 48 billion barrels, and the repeated cessation of oil production has affected global oil production, although it contributes only a small percentage of global oil exports, but the issue of revenue distribution is for the West in particular a deep dilemma, as it does not want the emergence of a strong African party that could change the existing equations in the continent.

 

The issue of international conflict is linked to curbing any experiment that can draw features for the return of the influential Libyan role, distributing oil wealth between the eastern and western regions, where the eastern region acquires most of the oil and gas fields in the country, in contrast, the government in Tripoli seeks to maintain its share of oil revenues, and it accounts for an estimated 91% of oil revenues, which amounted to about $ 22 billion last year, and this explains the lack of a final agreement in Libya, where The current distribution is more consistent in the desire of the United States and Europe to control the flow of oil or even its prices internationally.

2. The issue of closure formed part of the mutual pressure operations between the east and west of Libya, the sharp decline in 2014 due to unrest and attacks on oil facilities was dealt with with settlements, as happened in 2017 after signing agreements with some tribes and local groups that were protesting the distribution of oil wealth, but the balance in production processes was not enough to stabilize work in the oil fields, in 2021 only there was a failure in production for more than once, which began in January Through the Sharara field, the largest oil field in Libya, due to the closure of the pipeline linking it to the port of Zawiya, and in March the El Feel field, the second largest oil field in Libya, was disrupted due to the closure of the safety valve by an armed group, in April the suspension of the Al-Wafa and Naqoura fields was prolonged due to the strike of workers demanding better living conditions, and the order was repeated in July by closing the pipeline linking the Al-Farag field in the port of Mellita, and in August 2021 the production of the Al-Sarir and Al-Masala fields in eastern Libya stopped, Due to maintenance and modernization work, in September 2021, production of the Sharara field stopped again due to an attack by an armed group.

3. Libya ranks eighth in terms of production within the Organization of Petroleum Exporting Countries (OPEC), which gives closures a picture of the intertwining of oil and politics in it, turning the oil sector from a mere economic asset to a political tool used by various regimes and factions to enhance their power and influence. Global oil prices were affected as a result of Libyan fluctuations, and although these effects remained within clear limits, and their repercussions did not lead to severe crises at the level of global markets, but it is noticeable that oil prices rose significantly in 2011, 2014 and 2020, due to the lack of supply and demand and the link between the situation and the economic recovery, then oil conditions improved in 2021 after the lifting of the blockade, the signing of the ceasefire agreement, and the return of production to pre-crisis levels.

4. The distribution of oil wealth in Libya remained a controversial issue, and the search for equitable distribution fueled internal conflicts and obstructed efforts to achieve national reconciliation, which confirms the recent “partial closure”, or even repeated attacks on oil pipelines by factions or tribes, as the economic repercussions of the suspension of oil exports led to financial crises, undermining public services, and exacerbating social disparities.

There is a comprehensive approach missing to address the political, economic and technical challenges facing the future of Libyan oil, and if internal disputes are a primary cause, they are at the same time based on international positions that try to influence the parties to the Libyan conflict, as achieving stability and prosperity in Libya requires not only managing its oil wealth wisely, but also activating African systems that can reduce the impact of external factors, or even create stronger relations at the North African level.

 

Written by Mazen Bilal

 

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