Libya’s oil output appeared to reach a healthy 1.05mn bpd in January 2018, boosted by the restoration of 45,000 bpd of production from the As-Sarah field. Average oil production was 824,000 bpd in 2017, a significant rise from 2016, when it fell to an annual average of just 380,000 bpd. National Oil Corporation (NOC) Chairman Mustafa Sanallah said on 30 January that the country could easily add a further 50,000-100,000 bpd of production if the NOC is given adequate funding. Based on last year’s record, this is likely to be true (although the funding condition represents a large source of uncertainty). Major oil production expansion plans are being discussed in 2018 for Sharara (40,000 bpd) and, most importantly, the Waha Oil Company fields (with a potential increase of over 100,000 bpd). Though funding and electricity shortfalls are also significant, the linchpin for such expansion will be security, particularly at storage and export terminals in the Gulf of Sirte.
Since the seesaw fighting of March 2017, these “oil crescent” areas have been secured by Khalifa Haftar’s Libyan National Army (LNA), to the exclusion of their prior overlord, renegade Petroleum Facilities Guard (PFG) commander Ibrahim Jadhran. Reassured by a reasonable degree of stability since March, the Waha Oil Company is planning to repair two of 12 damaged oil storage tanks at the Es Sidr loading terminals in 2018, adding 1mn barrels of storage to the existing 1.5mn barrels.
This kind of buffer will help maintain a continuous flow when there are stoppages, like that which occurred between 26 December and 3 January after one of Es Sidr’s feeder pipelines was damaged by an unexplained explosion. If Waha fields like NC-98 and North Gialo are to register the major production gains expected by the NOC, the oil crescent terminals will need to see further stability and development, including restoration of another 10 tanks in Es Sidr.
The LNA currently holds the Gulf of Sirte through fragile tribal alliances in the oil crescent, underpinned during emergencies by UAE and Egyptian air power, which was critical to restoring the terminals to LNA control in 2017. Militarily, the LNA relies upon a much smaller cadre of reliable troops that Haftar claims – a total of less than 20,000 regular and irregular forces combined nationwide, as opposed to the claimed figure of around 70,000.
At heart, the LNA is a delicate network of shifting alliances, full of undisciplined warlords such as Mahmoud Mustafa Busayf al-Warfalla – the LNA Special Forces unit commander indicted in 2017 by the International Criminal Court for war crimes, who recently backed out of an agreement to surrender himself to the court. Nevertheless, the LNA’s weaknesses are offset by the shortfalls of its opposition, particularly the bumbling Benghazi Defense Brigades and the fading PFG warlord Ibrahim Jadhran.
Current developments in Benghazi and Derna in eastern Libya may provide some pointers concerning the future of the LNA in 2018. Events such as the unusual 23 January 2018 double car bombing of the Baya’at al-Radwan mosque in Benghazi – which killed at least 34 people and wounded more than 90 – are sharpening fears that Haftar may be manipulating local security conditions to reinforce his narrative regarding the need for continued military rule by the LNA.
Haftar’s fragile web of alliances seems to be increasingly under strain, including a gradual distancing of his tribal opponents, former confidants and even current advisors like LNA Chief of Staff Abdulrazaq al-Naduri. Like many strongmen, Haftar appears to be excessively narrowing the patronage base of his movement until it largely favors family members – “Haftar Inc.,” as the LNA is increasingly called in eastern elite circles.
The current intensification of pro-LNA airstrikes and military probes of Derna – Operation Omar al-Mukhtar – will likely demonstrate how much political and military strength the LNA has. Coinciding with a major Egyptian counterinsurgency drive against Islamic State forces in Sinai, the operation is intended to underline Haftar’s credentials as an anti-Islamist terrorist-hunter. US aerial surveillance and UAE and Egyptian airstrikes may reinforce this image outside of Libya. Inside the country, the LNA is risking the alienation of Dernawis and other eastern Libyans by tightening the humanitarian siege and increasing airstrikes. Concerns about Haftar’s reliance on Egypt – sharpened by his 7 February visit to Cairo – will tweak nationalist sentiment in the east.
We do not expect Haftar to mount a full assault on Derna, in part due to lack of forces, but he is trying to bring the independent city to heel with a tighter blockade as well as air and artillery strikes. If the LNA becomes overcommitted to the fight in Derna, it will increase the risk of the Benghazi Defense Brigades and Jadhran-aligned forces mounting a new effort to recapture the oil crescent. The more likely risk of the LNA itself using terminal closures for leverage was highlighted by Sanallah on 30 January, when he noted, “I don’t believe the LNA and its leadership will now allow the tactics of Jadhran to be used under their supervision, especially because of their devastating economic effect.”
However, Sanallah’s real view is likely an exact inversion of these words, anticipating that an embattled Haftar may eventually adopt the same pressure tactics as other warlords sitting on oil infrastructure. After Saddam’s fall in Iraq, it was said that the country had swapped one big dictator for lots of little ones; in Libya, the LNA’s seizure of the oil crescent could see the reverse phenomenon take place.