Libya has now opened the floodgates of its oil - tentatively - by lifting force majeure (as of Sunday) on its largest oilfield, al-Sharara. It’s a fragile start, at best, because it hinges on an agreement between the militias of the Petroleum Facilities Guards (PFGs) and the NOC.
What could go wrong? Just about everything. A “gentleman’s” agreement with militias is never a solid thing.
Turkey, for one, is still warmongering and is desperate to provoke the LNA’s General Haftar into another fight. And much is at stake for Turkey, so meddling and interference should be monitored with extreme caution. The brazen deal Turkey cut with the GNA (led by Libyan prime minister Sarraj) is now in question. That deal was Ankara’s last-ditch effort to remain the Mediterranean oil and gas game, because it created a new maritime boundary threatening Greek sovereignty.
Egypt is still on red alert, and Cairo has made it clear that it views the deal between Sarraj (who has said he would resign this month) and Erdogan as illegitimate. The normally toothless European Union has also categorically rejected the demarcation.
Turkey needs the Libyan war to continue because, the way it stands, it is not in Ankara’s favor.
But Haftar is letting the oil flow, for now, and is not being provoked. But this is still a question of revenues. Oil revenues are temporarily going to the Libyan Foreign Bank, rather than the central bank in Tripoli. Until the distribution of oil…
Libya has now opened the floodgates of its oil - tentatively - by lifting force majeure (as of Sunday) on its largest oilfield, al-Sharara. It’s a fragile start, at best, because it hinges on an agreement between the militias of the Petroleum Facilities Guards (PFGs) and the NOC.
What could go wrong? Just about everything. A “gentleman’s” agreement with militias is never a solid thing.
Turkey, for one, is still warmongering and is desperate to provoke the LNA’s General Haftar into another fight. And much is at stake for Turkey, so meddling and interference should be monitored with extreme caution. The brazen deal Turkey cut with the GNA (led by Libyan prime minister Sarraj) is now in question. That deal was Ankara’s last-ditch effort to remain the Mediterranean oil and gas game, because it created a new maritime boundary threatening Greek sovereignty.
Egypt is still on red alert, and Cairo has made it clear that it views the deal between Sarraj (who has said he would resign this month) and Erdogan as illegitimate. The normally toothless European Union has also categorically rejected the demarcation.
Turkey needs the Libyan war to continue because, the way it stands, it is not in Ankara’s favor.
But Haftar is letting the oil flow, for now, and is not being provoked. But this is still a question of revenues. Oil revenues are temporarily going to the Libyan Foreign Bank, rather than the central bank in Tripoli. Until the distribution of oil revenues is resolved, Libya’s oil production will be held hostage to potential shutoff. Right now, Haftar is getting oil revenues to the east where he needs to fund his support. That was part of the deal that got the oil flowing again.
The reopening of the al-Sharara oilfield has nothing to do directly with talks between Libya’s rival factions scheduled for November in Tunisia.
For now, we’re looking at another 40,000 bpd coming out of Sharara for an initial period, with the potential to ramp up to 300,000 bpd just from that field. Libya hit 300,000 bpd in the last week of September.
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