Halt in oil production threatens stability of Libya, UN warns

The UN on Thursday raised concerns about the recent halt in production and exports of crude oil at Marsa Al-Hariga port, and further imminent shutdowns at other facilities, and the destabilizing effect it could have on the country.

“The uninterrupted production of oil, as well as maintaining the independence and impartiality of the NOC (The National Oil Corporation), remains a vital cornerstone to the economic, social and political stability of Libya,” said the UN Support Mission in Libya (UNSMIL).

NOC blames the interim government for the halt in production at the eastern facility, citing the Central Bank’s refusal for several months to pay out funds from the oil sector budget. The funding shortfall has caused many companies to fail to fulfill their obligations, and to the deterioration of storage tanks. It has also had negative effects on pipelines, wells and oil reservoirs.

Oil is by far Libya’s biggest source of revenue. After years of blockades that at times reduced the flow of oil almost to zero, production rebounded to more than 1 million barrels a day after the blockades were lifted in September.

The NOC has managed to remain independent despite bitter political disputes over the country’s oil. Recently, however, there have been complaints about interference by the new government. The interim authority includes a three-member Presidential Council and a cabinet, which was appointed under a UN-led process to lead the divided country toward general elections in December.

The interim leadership is also tasked with preparing for the reunification of economic and financial institutions, tackling the dire living conditions many Libyans have been forced to endure, and enacting economic reforms needed to ensure a more equitable distribution of oil revenues in the country, which is a member of OPEC.

UNSMIL urged all parties to ensure that NOC remains “an independent, technocratic and well-sourced institution, and to ensure the transparent and equitable management of resources, as set out in the Libyan Political Dialogue Forum Roadmap, to combat corruption. This is of critical importance for the government that is requested to improve the delivery of basic services to the Libyan people.”

Libya descended into civil war after the NATO-backed uprising in 2011 that toppled dictator Muammar Qaddafi. Fighting in recent years pitted the Government of National Accord against the forces of eastern military commander Khalifa Haftar. Each side had support from competing regional powers.

“Libya is only now emerging from a very costly conflict, and there are multiple urgent needs that need to be addressed to improve the quality of life of Libyans throughout the country,” UNSMIL said.