Libya oil to flow after Haftar hands over central fields

Feild Marshal Khalifa Haftar has accused the central bank in Tripoli of funding militias with oil revenue

Field Marshal Khalifa Haftar, left, at a military parade in the eastern city of Benghazi on May 7, 2018. His Libyan National Army controls the east of Libya. AFP

A military-enforced blockade on four of Libya’s largest oil terminals has been lifted and exports are expected to resume within hours.

The state oil company said control of the fields had been handed over to them in a surprise, but welcome move, by the self-styled Libyan National Army led by Khalifa Haftar.

It came only a day after the UN-backed government – which Field Marshal Haftar opposes – asked for an audit on the country’s central bank amid allegations of corruption. All Libyan oil profits are distributed by the bank, but the LNA accuses it of funnelling money to militias, extremists and the Muslim Brotherhood.

The LNA retook the ports of Ras Lanuf and Sidra in Libya’s central coastal region from a coalition of Islamist groups and Chadian mercenaries nearly three weeks ago. Only four days later the blockade began at the two facilities and also at the terminals of Zuwetina, 140 miles east of Ras Lanuf, and Hariga, near to the city of Tobruk and close to the Egyptian border. Both Zuwetina and Hariga have been under the LNA’s control for a number of years.

Libya’s ailing economy is desperately reliant on oil and exports hovered around one million barrels per day last month. The closing, however, of the four terminals two weeks ago reduced output by 800,000. Field Marshal Haftar also sought to close revenue streams to institutions in the capital Tripoli, diverting them instead to the east and south of the country, areas that he said were desperately overlooked.

State oil chief Mustafa Sanalla said: "We need a proper debate on the fair distribution of oil revenues. It is at the heart of the recent crisis. The real solution is transparency, so I renew my call on the authorities, the Ministry of Finance and Central Bank, to publish budgets and detailed public expenditure.

“Libyans should be able to see how every dinar of their oil wealth is spent. I will work with other national stakeholders to enhance transparency and resolve this crisis – for the benefit of all our citizens.”

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On Tuesday evening the head of the UN-backed government, Faiez Serraj, asked the UN Security Council and international experts to form a committee that could audit the central bank – both the one backed in Tripoli and a rival administration supported by the LNA.

“Transparency about spending would enable Libyans to see who is getting what from Libya oil," said former US Special Envoy to Libya Jonathan Winer. [The information] would surely contain some shockers.”

Whether the audit is the reason behind Field Marshall Haftar lifting the blockade is unclear. The international community condemned the blockade, while governments in Europe and North America applied diplomatic pressure towards a resolution.

Officials supportive of Field Marshal Haftar were forced to deny rumours that US President Donald Trump had threatened sanctions if the blockade was not lifted.

Field Marshal Haftar had called for the sacking of the central bank chief in Tripoli, Sadiq Al-Kebir, something that has not happened. Regardless, the Field Marshal's complaints may have driven forward calls for transparency in Libya’s financial systems.