Libya walks towards the light

Author Ben Winkley

Of the many points of contention that will confront Opec ministers in Algiers, where they will gather informally at the end of this month in the latest push to, er, fix the oil market, is how to accommodate the group’s outliers.

Of the many points of contention that will confront Opec ministers in Algiers, where they will gather informally at the end of this month in the latest push to, er, fix the oil market, is how to accommodate the group’s outliers.

Most of the attention, as ever at these gatherings, will be on the big beasts. Will Saudi Arabia and Iran find common ground? Will Iraq rein in its output ambitions? But if, somehow, these three manage to fashion an agreement that will stabilise the oil price at an acceptable level, this will leave little wriggle room for Opec’s benighted trio of Venezuela, Nigeria and Libya.

It’s a strong field, but the latter probably just about takes this year’s prize for the most dysfunctional Opec member state. No-one is taking up arms just yet in Venezuela, while in Nigeria there is at least an active peace process.

But the north African nation is a state in name only. Forces opposed to the UN-backed Government of National Accord have ramped up military operations and plans to restart exports are on hold.

For Libya, the light at the end of the tunnel is invariably the light of an oncoming train.

This has spooked international governments. A statement from the US State Department, issued on behalf of Washington and five European governments, calls for protagonists in Libya’s oil crescent to take a step back. The language used is informative. Although the six powers reaffirm a commitment to the UN Security Council resolution that assures Libya’s sovereignty, the statement is focused squarely on the risk posed to country’s oil infrastructure.

The State Department made clear that Libya’s oil infrastructure, production and exports “must remain under the exclusive control of [state-owned oil company] NOC”. Until that exclusivity happens, the country’s oil industry will remain out of control.

“We also call on all forces to avoid any action that could damage Libya's energy infrastructure or further disrupt its exports. Libya's oil belongs to the Libyan people,” it says — essentially echoing recent statements by NOC, one of the few institutions in Libya to have broadcast a consistent non-partisan, nation-building message throughout the civil conflict. The unspoken meaning behind these words is that the prospect of future oil revenue is pretty much the only thing keeping Libya together.

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