Libya's troubles deepen with tussle over control of National Oil Corporation

Interim government's removal of NOC chief Mustafa Sanalla could increase tensions with parliament in the east

Fighters loyal to Libya's Tripoli-based Government of National Unity stand guard outside the headquarters of Libya's National Oil Corporation in the capital after the removal of its chairman, Mustafa Sanalla. AFPShow less

The struggle for control of Libya’s oil industry took a new twist this week when one of the country’s two rival governments sacked the head of the state oil corporation and sent troops to occupy its headquarters.

Libya’s Government of National Unity (GNU) dismissed Mustafa Sanalla, chairman of the National Oil Corporation (NOC), on Wednesday, replacing him with Farhat Bengdara, who led Libya’s central bank under former dictator Muammar Qaddafi.

When Mr Sanalla refused to go, armed units forced their way into the NOC headquarters in downtown Tripoli.

Protests against the action were led by the United States, which expressed "deep concern" at the prospect of removing Mr Sanalla by force.

Libya has Africa’s largest oil reserves, and hydrocarbons account for 95 per cent of government revenues, making control of the industry a key point of contention between the rival governments.

Mr Sanalla has refused to recognise the GNU’s authority to sack him, and on Wednesday night delivered an emotional televised speech accusing GNU prime minister Abdulhamid Dbeibeh, of being corrupt and incompetent. Berating Mr Dbeibeh, Mr Sanalla said: “You do not have the ability to make decisions.”

Mustafa Sanalla is challenging the decision by Libya's interim prime minister to remove him as head of the National Oil Corporation. AFP

The next morning, US ambassador Richard Norland took the unusual step of publicly supporting Mr Sanalla.

“We are following with deep concern developments surrounding the National Oil Corporation, which is vital to Libya’s stability and prosperity, and has remained politically independent and technically competent under the leadership of Mustafa Sanalla,” he wrote on Twitter. “The reported replacement of the NOC board may be contested in court but must not become the subject of armed confrontation.”

Despite US objections, on Thursday afternoon Mr Dbeibeh sent armed units to force their way into the NOC headquarters. Video circulating on social media showed the soldiers, some in black ski masks, pushing through a throng of pro-Sanalla NOC employees in the entrance hall of the building.

The troops established control of the building, and later that afternoon Mr Bengdara gave a press conference on the steps outside. “We should work together to rebuild Libya’s oil production capabilities and make sure that the oil sector remains neutral to any political conflicts,” he said.

On Thursday evening, Mr Dbeibeh announced that he was seeking to have Mr Sanalla investigated on corruption charges.

American objections are centred on trying to unite Libya, and the fear that if one government controls the NOC, opposition will deepen from the other.

There is also opposition within the NOC and its affiliated oil production subsidiaries to the ousting of Mr Sanalla, who has led the NOC since 2014. Speaking on Thursday night from an undisclosed location, Mr Sanalla told the Reuters news agency: “All of them [NOC subsidiaries] are with us.”

But one key NOC subsidiary, Agoco, in eastern Libya, issued a statement in support of Mr Bengdara.

Farhat Bengdara outside the headquarters of Libya's National Oil Corporation on July 14, 2022 after being appointed as its chief by the Government of National Unity in Tripoli. AFP

As well as objections from parliament, opposition to the removal of Mr Sanalla has come from Khalid Al Mishri, head of the High Council of State, an advisory assembly that is part of Libya’s complicated governing structure. Britain added its concern about the takeover, with the embassy tweeting: “The independence and integrity of the NOC must be protected and respected.”

Many other powers have yet to comment. This is partly because some countries think that, as the internationally recognised government, the GNU is entitled to full control over Libya’s oil industry.

But there is concern in Libya and abroad that the takeover will increase tensions. The country is still recovering from a six-year civil war that ended with a UN-brokered ceasefire in October 2020.

The UN said it wanted independence for the NOC, without commenting directly on the removal of Mr Sanalla.

"We support the unity, integrity and independence of the National Oil Corporation, and we want all of the parties to refrain from politicising this institution," said Farhan Haq, deputy spokesman for the UN secretary general.

The GNU’s right to take over the NOC is also contested, because it was created only as a temporary administration last year to supervise elections scheduled for December. Those elections were cancelled, after disputes about which candidates could stand, and the GNU then announced it would stay in office indefinitely until Libya is able to hold elections.

Parliament has objected to the GNU continuing to hold power, and in March formed a rival executive, the Government of National Stability (GNS) based in the east of the country.

In January, Mr Sanalla obeyed an instruction from parliament to stop sending oil revenues to the GNU. But in April, facing legal action from the GNU, he changed his mind and transferred $6 billion to government coffers.

As a result, pro-parliament protesters began a series of blockades of eastern oil ports which have caused oil production to fall by half, to 600,000 barrels a day. The protesters accuse the GNU of not sharing oil revenues equally with east Libya, a charge the GNU refutes.

Mr Bengdara’s big test will be whether he can end the oil protests, or whether his appointment further exacerbates tensions.