Libya’s former rebels to keep oil flowing amid Islamist surge

BENGHAZI (Bloomberg) -- The group that controls Libya’s largest oil port pledged to work with the government to keep crude flowing to international markets and defend oilfields against any advance by Islamist militias that seized Tripoli, the country’s capital.

“We are in agreement with the government of Prime Minister Abdulla al-Theni to work together and defeat Islamist terror,” said Ali Al-Hasy, a spokesman of the Executive Office for the Barqa region, which seeks self-rule for eastern Libya. “The oil fields and oil ports in the region between Benghazi and Sirte are well under our control. Our role is to make sure oil is flowing and production is rising, to ensure that the government has the means to provide for the needs of the people and to successfully confront these terrorists.”

While Islamist militias seeking to expand their political power seized control of Tripoli last month, forcing the government to move its meetings to the eastern city of al-Bayda, most oil fields and crude export terminals are hundreds of miles away from the conflict. The Barqa group holds sway over the Petroleum Facilities Guard deployed around oil facilities including Es Sider and Ras Lanuf, Libya’s largest and third-largest oil export terminals. If the militias attempt to seize these facilities, “they will confront a force made of steel,” said al-Hasy, speaking from eastern Libya.

Libya’s crude output more than doubled since PFG forces loyal to the Barqa group, which was pressuring Libya’s government to change how it distributes oil revenue, lifted a yearlong blockade on eastern ports in July. It is now producing about 725,000 bpd, compared with 300,000 bpd in June, according to data compiled by Bloomberg.

Production Paradox

“The paradox of rising oil production in a context of growing violence is explained by the federalists’ alignment with the non-Islamist camp and the government,” Riccardo Fabiani, Eurasia Group analyst, said by email. The Islamists now control Tripoli and Benghazi, but not the oil and gas facilities, he said.

Most factions in the country with Africa’s biggest crude reserves want to maintain production, Libya’s Acting Oil Minister Omar Shakmak said Sept. 1.

“So far, there has been no threat made by any of the warring factions against the oil facilities,” Shakmak said by phone from Benghazi. “My thinking is that they all realize that oil is a resource for all the Libyans, paying for their food and their livelihoods.”

Daily output should increase to 800,000 bbl at the end of the month, and to 1 MMbbl by year-end, he said. Current output is still about half what it was before the 2011 rebellion that ended Muammar Qaddafi’s 42-year rule.

While Islamists have focused on urban centers in their push for power “it is critical for the Barqa to protect oil production,” Theodore Karasik, director of research at the Institute for Near East and Gulf Military Analysis, said by email.