Analysis: Airstrike Hits Oil Warehouse Facility in Tripoli Underlining Increasing Strain on the Sector during Ongoing Conflict

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Description

  • Alleged LNA airstrike on Mellitah Oil and Gas facility in Tajoura, eastern Tripoli injures three workers and destroys a warehouse.
  • The airstrike is the fourth time National Oil Corporation facilities have been targeted in and around Tripoli since the current conflict began on 4 April.
  • The oil sector is becoming increasingly politicised and militarised, and it is likely to be a main focal point of control in any future scenario for Libya.

Event

A warehouse belonging to Libyan National Oil Corporation (NOC) subsidiary Mellitah Oil and Gas (MOG), located in the Tajoura district east of Tripoli, was destroyed following an airstrike during the night of Tuesday, 18 June. Imagery from the attack shows the main infrastructure of the building completely destroyed, with a subsequent fire resulting from the airstrike gutting the internal structure and assets.

Three MOG workers suffered minor injuries, and emergency services arrived at the scene to treat the wounded and extinguish the blaze. Although not significant in terms of damage, it is the fourth direct or indirect attack on NOC infrastructure in and around Tripoli since Khalifa Haftar’s Libyan national Army (LNA) advanced to the capital on 4 April 2019. Local media has attributed the strike to the LNA Air Force, but although this is the likely scenario due to the location, it remains unconfirmed.

As the conflict has become protracted in Tripoli, the oil and gas sector has increasingly become the subject of a nationwide power struggle between the rival Government of National Accord (GNA) and LNA, and the NOC faces numerous challenges due to the increasing militarisation and politicisation of the industry. These challenges include the potential takeover of facilities and threats to control oil exports by the LNA, whilst the potential for militant attacks on facilities remains a constant concern as the national security environment deteriorates.


Increased Tension and Targeting of the Oil Sector

The incident in Tajoura reflects the NOC’s growing concern over the oil sector being dragged directly into the conflict. Since the LNA advance, Libya has managed to maintain production in adversity, in order to preserve the county’s main resource and export; the International Energy Agency (IEA) reported that production in May was 1.16 million barrels per day (bpd), level with April; an increase from 1.07 million bpd in March.

The NOC is a non-political entity which is the UN-recognised institution, and is the authorised body responsible for oil revenues and exports which are channelled into the legitimate economy. Despite this non-political status, Haftar has increased his anti-NOC rhetoric since April, claiming it is using oil revenue and resources to fund the GNA in its fight against the LNA in Tripoli.

This stance has led to Haftar attacking NOC Chairman Mustafa Sanalla, who has been lauded for his part in the re-growth of the Libyan oil industry, with the LNA leader keen to designate him and other NOC associates as ‘terrorists’. Sanalla has responded by accusing the eastern interim government and its rival NOC of illegally exporting oil in order to provide funding for LNA forces.

As the conflict has endured longer than Haftar originally anticipated, and his forces become further stretched, he needs to secure hard currency to fund his forces, whilst also being aware of the need to secure oil facilities against any militant threat, or anti-LNA groups. Such claims and counter-claims have been a feature of the propaganda war conducted by both sides in the conflict; from an LNA perspective, delegitimising the NOC can be seen as a potential platform to justify LNA incursions into oil facilities, and use oil as a strategic asset to bargain with in the future, regardless of the outcome in Tripoli.

As the conflict continues, tit-for-tat accusations and steps to secure funding from the eastern-interim government are likely to continue, although in the medium term such moves will only serve to increase the instability of the oil sector and the rival institutions in Libya. From a security perspective, the NOC has also raised concern over the militarisation of its facilities by LNA forces. Sanalla complained on 13 June that 80 LNA personnel entered Ras Lanuf Terminal on 5 June, taking over dormitories and attempted to refuel a warship, and reiterated that all facilities should not be misused by parties in the conflict.


Outlook/Scenarios

In the short term, the oil sector is likely to become increasingly politicised and militarised. As the conflict continues, the need to secure funding is likely to lead to an increase in illegitimate oil exports by the rival eastern government. This will lead to an increase in tension between the LNA and the NOC, which could lead to further fragmentation of the rival institutions and targeting of individuals and facilities.

In Tripoli, as the conflict remains locked in a territorial stalemate, this increases the likelihood of airstrikes or indiscriminate shelling directly or indirectly targeting oil and gas facilities as the LNA attempts to create new fronts towards central Tripoli. The local infrastructure, public services and humanitarian situation is likely to deteriorate in the short term, putting additional strain on the economy and the need for resources.

In the Oil Crescent and Fezzan region, the potential for oil facilities to be targeted by Islamic State (IS) and other militant groups is likely to increase in the medium term, as Haftar’s forces are focused on Tripoli, although heightened security is anticipated in the short term around these facilities to counter this threat.

The outcomes for the oil sector are dependent on the success or failure of the LNA advance; in the event Haftar and the LNA are forced to withdraw from Tripoli, this could lead to facilities being seized by the withdrawing forces, thereby further destabilising the sector. A victory for Haftar could also witness a seizure by LNA forces, which then introduces issues such as force majeure and international recognition of oil production and exports.

The best case scenario for Libya is also the most unlikely in the long term; any conflict resolution between GNA and LNA forces could lead to the political process being revisited, followed by the unification of rival institutions, including the NOC. This could, in turn, lead to a comprehensive national oil facility protection force which has been championed by Sanalla, which would secure and enable maintenance of oil production and exports.