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Libya’s Wars, Russian Investment, and the Growing Danger of a Breakup

On March 15, the Libyan National Army (LNA) under the command of General Khalifa Haftar, successfully retook control over the vital oil ports of Sidra and Ras Lanuf from the Benghazi Defense Brigades (BDB), which had briefly seized them on March 3. Despite the victory, the status of the key oil ports remains unsettled. The BDB still maintains bases in Waddan in the eastern desert, and could resume efforts to retake the key oil export centers, especially if they can work out an agreement with well-trained Misurata militias, that recently succeeded in driving the Islamic State (ISIL) fighters out of Sirte, with significant US air support.

In early April, the large Sharara oil field was forced to halt production twice, due to fighting between the rival military forces of the Government of National Accord (GNA) in Tripoli and the House of Representatives (HOR) in Tobruk. The battle to control the Tamenhint Air Base near the largest city in the region, Sabha, is focused on the control over the pipeline running from the Sharara basin fields to the Zawiya port and refinery. On April 9, for the second time in the month, the flow of oil through the Sharara-Zawiya pipeline was stopped, for fear of damage due to the intense fighting. 

In response to the danger to the pipeline, the Libyan National Oil Company (NOC) invoked “force majeure,” warning foreign buyers that the contracted Libyan oil deliveries might be defaulted. By invoking “force majeure,” the NOC averted potential legal liabilities if the deliveries are actually unfulfilled.

The Sharara fields generate 200,000 barrels per day, out of the recent Libyan total of 700,000 barrels. The field is managed through a joint venture of NOC and Spain’s Repsol SA. The Libyan National Oil Company had scheduled foreign delivery of 4.83 million barrels in seven separate shipments for the month of May 2017.

Oil exports are more vital to the Libyan economy than ever, as foreign hard currency reserves have shrunk to $44 billion from over $100 billion in 2013. Last November, the NOC’s head Mustafa Sanallah projected that oil production would plateau at an average of 800,000 barrels a day in 2017, generating $15.84 billion in revenue. Sanallah has projected that the NOC will need $2.5 billion in capital investment in 2017 to repair and expand pipeline, refinery and port infrastructure to meet those interim production goals.

On February 22, 2017, Sanallah and Russia’s Rosneft head Igor Sechin met in London to sign a joint exploration and production agreement, which is the first new foreign investment deal since the revolution and the civil war began in 2011. Based on that Russian deal, Sanallah revised oil production estimates up to 1.25 million barrels per day by yearend.

The fighting near the Sharara field, around the oil ports of Sidra and Ras Lanuf, and in the Sirte Basin, briefly disrupted production by the Waha Oil Company, a longstanding joint venture of NOC, ConocoPhillips, Hess and Marathon Oil. Fields owned by Germany’s Wintershall were so far unaffected.

The United Nations Special Envoy for Libya, Martin Kobler, has been calling for the creation of a 30-person joint commission, with representatives of the Tripoli-based and UN-created Government of National Accord (GNA) and the Tobruk House of Representatives (HOR) to create a new unity government. The subject was a significant topic at the April 10-11 Group of Seven foreign ministers meeting, hosted by Italy, and is on the table at the Moscow talks between US Secretary of State Rex Tillerson and Russian Foreign Minister Sergei Lavrov. As the former Chief Executive Officer of Exxon-Mobil, Tillerson is intimately familiar with the vital role of the petroleum sector in Libya’s economy. 

But on April 6, 2017, the British influential think tank, Chatham House (the Royal Institute for International Affairs) published an assessment of the Government of National Accord, concluding it had “little authority and limited legitimacy in the eyes of many Libyans and is dependent on a group of Tripolitanian militias for its protection.” Indeed, on March 17, protesters marched through the streets of Tripoli, demanding the creation of a strong government and an end to the militia rule over the capital. Private militias control security at 150 local bank branches throughout the capital, and regularly extort kickbacks from local businesses and kidnap wealthy local residents for ransom. A recent United Nations Panel of Experts on Libya report singled out one such criminal militia boss, Haitham al-Tajuri, who has become wealthy through these criminal shakedown operations, but is still considered one of the key boosters of the GNA. His forces recently expelled the rival Government of National Salvation (GNS) from their Tripoli headquarters.

Reflecting the British assessment of the weakness of the GNA, Foreign Minister Boris Johnson has recently called for the GNA to invite General Haftar to join, despite the fact that this would lead to a likely revolt by militias associated with Libyan Dawn, who are based in western Libya and are avowed enemies of Haftar.

Russia, in addition to the Rosneft deal with NOC, has been playing a growing role in the efforts to bring the Libyan civil conflict to an end, providing material support for General Haftar’s LNA, while also courting GNA Prime Minister Fayez al-Sarraj, who recently visited Moscow. 

On April 5, 2017, al-Sarraj was in Stuttgart, Germany, meeting with General Thomas Waldhauser, the head of the United States Africa Command (Africom), where he got a very different message: Stick with the West and don’t give Russia a further beachhead in the Mediterranean Sea region. A small contingent of Russian Special Operations Forces was recently at a base in western Egypt, near the Libyan border, and earlier, Russian forces, possibly “private” contractors, were stationed until February 2017 at the Mediterranean coastal city of Mersa Matrouh just 50 miles from the Libyan border.

Dr. Mark Katz recently wrote a paper for the Atlantic Council, a tank in Washington, warning that the Russians could build their political clout in Italy and other Mediterranean European countries, by curbing the refugee flow from North Africa, through their backing of General Haftar’s forces. Katz quoted Admiral Michelle Howard of the Sixth Fleet, noting additionally that the Russian Navy is more active today in the Mediterranean region than it was at the height of the Cold War.

While the Barack Obama Administration backed the United Nations efforts to create the Government of National Accord, and deployed air support for the ouster of ISIL from Sirte, the new Donald Trump Administration has yet to devise a Libya strategy. President Trump is considering three individuals for the post of Presidential Special Envoy for Libya. Sebastian Gorka, a Deputy Special Assistant to the President for Counter-terrorism has been pushing hard to get the job. But he has openly advocated for a breakup of Libya into three separate states as they existed under the Ottoman Empire: Cyrenaica in the east, Tripolitania in the west and Fezzan in the south. The other two contenders for the post are Peter Hoekstra, a former Chairman of the House Select Committee on Intelligence, and Phillip Escaravage, a former US intelligence officer who specialized in Libya. In 2015, Hoekstra wrote a book, “Architects of Disaster—The Destruction of Libya” which chastised the Obama Administration for the overthrow of Qaddafi and its support for jihadists in that bungled effort.

While Gorka was severely criticized by Mattia Toaldo of the European Council on Foreign Relations, who called Gorka’s scheme to break up Libya “clueless,” there are other voices warning about the prospect of a dismantling of the Libyan state. On March 28, 2017, the Middle East Institute, another Washington think tank, published a paper by Emadeddin Muntasser and Mohammed Fouad, calling for the restoration of the 1963 Libyan Constitution, which established significant autonomy for the two most populous historical regions of the country. They concluded, “Failure to find a formula that brings together east and west, such as the 1963 constitution, could result in the country being divided in two. A split between Cyrenaica and Tripolitania, in which each state is able to administer its people in an effective manner, would be a much fairer option to the Libyan people than continued discord and chaos.” In the best case, the authors observed, the split could parallel the breakup of Czechoslovakia into independent neighboring Czech Republic and Slovakia. In the worst case, it could devolve into even greater war and chaos, as occurred following the split out of South Sudan. Given the pivotal role of oil in the economy of Libya, the Sudan parallel is, unfortunately, far more credible, though most Libyans oppose breaking up their country.

13 April, 2017

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