Libyan PFG Relinquishes Control Of Major Refinery

Following accusations of fuel smuggling from the chairman of Libya’s National Oil Corporation (NOC), the Petroleum Facilities Guard (PFG) has removed itself from the Zawiya refinery, Libyan media report, citing a letter from the NOC.

Yesterday, Mustafa Sanalla, the chairman of the state oil company, accused the chief of the Nasr brigade – the PFG unit controlling the refinery – of complicity in the smuggling of Libyan fuel abroad.

As Oilprice reported earlier this week, fuel smuggling in Libya has bloomed recently, in spite of the work of agencies such as the Anti-Smuggling Commission and NOC. A new armed group calling itself the Anti-Fuel-Smuggling Brigade has also appeared on the scene, stating it will fight fuel smuggling by attacking the tanker trucks carrying oil products to Tunisia.

The removal of the Nasr brigade from Zawiya, however, has wider implications: it can be seen as yet another step by the chief of armed militia the Libyan National Army Halifa Khaftar to consolidate his power and tip the scales further in favor of the LNA.

It was the LNA that took control of Libya’s oil ports in the Oil Crescent, wrestling it from the Petroleum Facilities Guards, and then handing control over to the NOC. The PFG, which is affiliated with the UN-backed Government of National Accord, had suspended all shipments from the ports, demanding financial compensation from the authorities, and has also substantially cut oil production.

The LNA is affiliated with a competing authority, the House of Representatives, based in eastern Libya but it has also been active – and successful – against Islamist armed groups, winning popularity among the population.

After the LNA took control of the Oil Crescent, Libya shipped its first export-bound cargo of crude in two years, on September 21, and since then has upped its daily crude output from 300,000 bpd to close to 700,000 bpd as of end-2016.

Meanwhile, the GNA has been rattled by the recent resignation of its deputy Prime Minister Musa al-Koni, who said the government has proved unable to tackle the numerous challenges for the country after the toppling of Muammar Gaddafi. It has also failed in winning the support of the House of Representatives, which in mid-2016 gave it a vote of non-confidence and asked PM Fayez al-Sarraj to change its makeup.

By Irina Slav for Oilprice.com