Libyan state oil chief stresses support across divided country

The head of Libya’s state oil company said he had the backing of both the government in Tripoli and the renegade general Khalifa Haftar who controls the east of the country, as he outlined plans to attract investment and boost production.

A battle for control of oil revenues has been at the heart of the conflict in the north African country over the past decade. Armed groups allied to Haftar, who commands the self-styled Libyan National Army, have frequently blockaded oilfields and export terminals as part of efforts to exert pressure on the government, cutting oil exports by a third in the first half of 2022 to fewer than 800,000 barrels a day.

Farhat Bengdara, chair of the Libyan National Oil Corporation since July, said he enjoyed support across the divided nation, which had allowed the Opec member to restore production to 1.2mn b/d.

“I can travel anywhere in Libya — south, east, west, north, wherever — and I’ve been working with all parties,” he said in an interview. “That kind of support is very important for NOC to continue production and continue improvement.”

Bengdara said his aim was to lift production to 2mn b/d over three to five years, as he pledged to review Libya’s fiscal regime to attract more foreign investment.

The NOC chief, a former governor of Libya’s central bank, pointed to a $8bn deal signed in January with Italy’s Eni to develop an offshore gasfield as evidence of progress. “You will see more of these big projects in Libya,” he said.

Planned changes to the fiscal regime for oil and gas investments would make Libya more “attractive to international investors”, he said, without providing further details.

He also said NOC was establishing a separate department to focus on gas production, with the aim of exporting more to European countries seeking to replace supplies from Russia. Libya supplies about 8bn cubic meters of gas to Europe annually through a pipeline to Italy, enough to meet about 2 per cent of the continent’s demand.

The latest phase in Libya’s decade-long civil conflict erupted in 2019 after Haftar launched an offensive on Tripoli to oust a weak UN-backed government. Prime minister Abdul Hamid Dbeibeh, a wealthy businessman, was appointed through a UN-sponsored process to organise elections in late 2021 but the vote was never held amid disputes over the rules.

Bengdara was previously based in the United Arab Emirates, where he ran a bank jointly owned by the UAE, Libya and Algeria. His appointment at NOC was part of a deal, mediated by the UAE, between Haftar and Dbeibeh, who now wants to hold on to power, according to analysts.

Mohamed Eljarh, head of the Libya Desk consulting firm, said Bengdara was a “guarantor for whatever understanding was reached between the two sides”. As part of that arrangement, members of Haftar’s LNA now received regular salaries from the Tripoli-based government in return for allowing the oil to flow, he added.

Bengdara was appointed following the ousting of long-serving chair Mustafa Sanalla, who last year told the Financial Times that Dbeibeh did not have the authority to dismiss him and that “masked, armed men” had forced their way into NOC headquarters to prepare the handover.

Bengdara said he had no knowledge of the alleged raid or the terms of any deal between Dbeibeh and Haftar. “I took office, according to the government appointment, and I’m doing my job,” he said.

However, he also suggested that his predecessor may have been too confrontational. “Sanalla’s personality was . . . confronting people, which created tensions with Haftar and with the government,” he said. “The central bank was not supporting him because he has problems with the central bank.”

Most diplomats credit Sanalla with having kept NOC above the political fray. Sanalla could not be reached for comment.

Additional reporting by Heba Saleh in Cairo