There is a knot in Libya’s already tangled web, which, with the passing months, seems to be the center point around which the crisis involving the North African country revolves. And that knot is formed by the fact that, on one side, Haftar controls a good part of the land but does not have control of the money, and on the other side, Prime Minister Al Sarraj controls the money but barely has control of the hallways outside his room in the presidential palace. And the future of Libya is being gambled on this entanglement.
Tripoli’s “vault”, the real objective
The fact that the Libyan economy strongly revolves around oil exports is a well-known fact. It is overseen by Noc (National Oil Company). Noc operates through joint ventures with foreign partners at the various oilfields scattered throughout the country. Libyan oil is very coveted, although production even in peaceful times has been quantifiably less than that of other countries in the region. In any case, crude oil produced in Libya has something that is not found in other places: it is, first of all, easy to import given the country’s proximity to Europe, but more importantly, it has certain elements that make it almost refined. Therefore, once imported, it can be used almost immediately. And this explains the “success” of Libyan black gold, with production that has remained at decent levels in the post-Ghaddafi years, with the exception of a few years.
The reason the mining industry, despite everything, is still standing is because of the fact that Noc is the only Libyan entity that hasn’t been unpacked and divided up among the various tribes and factions. For this reason, the company has continued to maintain its headquarters in Tripoli and has always answered to the governments installed in the capital. This is also because Noc isn’t autonomous. Its profits go to the central Libyan bank and Libyan institutions. Therefore, although they physically control the wells, the profits of extracting go to Tripoli and thus to the government of Fayez Al Sarraj. The “vault”, despite everything, is still in Tripoli, and this is a problem for General Haftar.
It’s true that he controls a large part of Libya with his army, but he receives no funding from the central bank, to the point that, in Cyrenaica, they had to “clone” money with an autonomous bank based in Al Beyda, which answers to the unofficial government in the East of the country. And the money that circulates in these regions is printed, among other things, in Russia. Liquidity problems have frequently emerged in Cyrenaica in recent months since little money is leaving the Tripoli treasury. When Haftar attacked Tripoli in April, he did so with the goal of reaching the treasury where all the oil money goes. And that’s the true objective of everyone: Al Sarraj is looking to hold it in the hands of the government while Haftar is looking to conquer it. Behind all this, Turkey and Russia are trying to mediate in the place of a dying Europe.
Could Haftar sell oil autonomously?
In a Libya where Noc constitutes the only still-united entity, a possible fracturing would mean further disaster. And this eventuality appears rather undeniable and not entirely avoidable. As is noted in the article by Cristiana Mangani in Il Messaggero, behind Haftar’s refusal of the ceasefire proposed by Turkey and Russia is the general’s aim to autonomously sell oil. This circumstance would resolve the financial problems in the region he controls and would help the economy breathe. However, in the meantime, it would alarm the international stakeholders present in Libya, including the general’s own allies. A first attempt at such occurred last November when the Brega Petroleum Marketing Company, a company based in Cyrenaica and controlled by Noc, named a parallel board of directors.
Their action was condemned by Noc, as well as by many foreign governments including the Usa, the Emirates, Italy and France. Haftar, however, could now aim higher. His refusal to lay down arms is a message intended to show how his drive will push forward until he manages to step foot in Tripoli or until he has his own revenue to draw from. And, in the coming months, much of the Libyan crisis will take place within this twisted state.
Translation by Alexa Ahern