US says Libyan National Oil Company head dispute should not become 'armed confrontation'

NOC head refuses to step down after GNU premier Abdulhamid Dbeibah ordered him to be replaced

Smoke rises form the headquarters of Libyan state oil firm. Reuters

The head of Libya's National Oil Company (NOC) on Wednesday refused an order from Prime Minister Abdulhamid Al Dbeibah to step down.

Mustafa Sanalla said the mandate for Mr Dbeibah's Government of National Unity (GNU) has expired, before armed forces encircled the NOC building.

The US embassy in Libya cautioned against turning the power struggle into an "armed confrontation", saying in a tweet on Thursday that it was concerned about the recent developments.

"The reported replacement of the NOC board may be contested in court but must not become the subject of armed confrontation," ambassador Richard Norland said.

The US official praised Mr Sanalla's role in running the company.

"[The NOC] is vital to Libya's stability and prosperity, and has remained politically independent and technically competent under the leadership of Mustafa Sanalla."

Mr Norland said "key public policy considerations" should focus on a mechanism for managing and overseeing oil revenues and restoring oil and gas production to address power shortages.

"Will Libyan leaders on all sides recognise that once again these developments demonstrate the urgent need for the political will to compromise and set the immediate stage for reconciliation and elections?" Mr Norland said.

The NOC denounced the deployment of armed groups, calling the protection of its building "a national duty". It put the onus of preventing harm to the oil company and its employees on Mr Dbeibah.

"The NOC holds Abdulhamid Al Dbeibah and commander Omar Bughdadah ... responsible for any harm caused to an employee in the oil sector and holds them fully legally responsible," the NOC said on Thursday.

Mustafa Sanalla, head of Libya's National Oil Corporation at the NOC headquarters in the capital Tripoli on January 19, 2022. AFP

The power struggle over the NOC is the latest crisis in a country that is run by two competing governments ― one in Tripoli led by Mr Dbeibah, who was appointed by the UN to run the GNU until elections, which failed to take place last October as planned.

The other is led by former interior minister Fathi Bashagha who was named prime minister in February. Mr Dbeibah has refused to step down after Mr Bashagha's appointment by parliament.

Mr Dbeibah named Farhat Bengdara and four others to make up the NOC's board of directors.

Mr Sanalla rejected the move. "This institution belongs to all Libyans and not to you," he said in a televised speech addressing Mr Dbeibah on Wednesday.

Despite sitting on Africa's biggest proven oil reserves, war-battered Libya suffers chronic power failures and rising levels of poverty. These have fuelled public anger that is piling pressure on the administration in Tripoli and its eastern rival.

On Wednesday, the NOC said it was lifting a force majeure at two export terminals in the east that had been blockaded for three months amid political turmoil.

Libya has been in crisis since the 2011 uprising that ousted Muammar Qaddafi. In 2014, it split between warring eastern and western factions before a 2020 peace process tried to knit the country back together.