[yt_dropcap type=”square” font=”” size=”14″ color=”#000″ background=”#fff” ] O [/yt_dropcap]n March 24 last, al-Sarraj dissolved his Petroleum Ministry and formally acquired direct control over the National Oil Company (NOC), namely the single Libyan oil company. Pending the very fierce civil war following the ousting of Gaddafi and his regime, NOC had remained substantially impartial and, despite the net decrease in oil extraction, it had managed to ensure part of proceeds to all the parties involved.
This happened also after Khalifa Haftar’s troops conquering the oil terminals of Es Sider and Ras Lanuf. According to the forecasts of the NOC Chairman, Mustafa Sanalla, the Libyan oil company could reach 1.25 million barrels / day late this year and 1.6 million barrels / day by 2022.In a recent conference in London, Sanalla said that all the existing contracts will be honoured by the structures of the Central Bank of Libya, which is aligned with al-Sarraj’s GNA.
Sanalla, however, made it clear that also the LNA government has a “key” to open the oil door and “both keys” – namely the key of al-Sarraj’s GNA and the LNA’s key – are needed to have access to funds. Clearly NOC is the only Libyan institution still believing in the future unity of the national territory.
Hence the choice of al-Sarraj – the only Libyan politician recognized by the United Nations and by the inept European Union who, however, does not even control the city where his government is based, namely Tripoli – is a choice reflecting the separation between the various parts of the old united Libya.
Indeed, division into three areas, namely Cyrenaica, Tripolitania and Fezzan, was the solution that Bevin and De Gasperi found in the aftermath of World War II – a choice that would have given the primary oil field, namely Tripolitania, to Italy, and Fezzan and Cyrenaica to France and Great Britain, respectively.
We would thus have avoided that real “war against Italy” which was the operation against Gaddafi.
Today, on the contrary, if the old Libya splits into its three traditional components, we will have Egypt in Cyrenaica, which is a primary strategic area for this country, Algeria in Fezzan and, in all likelihood, a mix of Great Britain and France in Tripolitania – hence Italy will be excluded from any game in Northern Africa.
As you make your bed, so you must lie on it.
Furthermore, at the end of last February, Sanalla had signed an agreement with Russia’s Rosneft so as to raise – even in a complex situation as Libya’s – the funds required to invest in technological upgrading and repair of extraction and distribution networks.
That was NOC’s primary problem during the Libyan civil war.
Also the Austrian OMV, which is certainly not in line with the French-British strategic balance, has renewed an old contract of 2008 with NOC for oil exploration and extraction in the Murzuq field, south of Tripoli.
Al-Sarraj political choice is clearly a reaction to Sanalla’s autonomy and responds to the need for the Western supporters of the Tripoli-based GNA to exclude other competitors in the still rich Libyan oil region.
Mustafa Sanalla’s reaction to al-Sarraj’s attempt to control NOC on his own was clear. In fact, the Chairman of the Libyan oil company said that only the two Parliamentary bodies based in Tripoli and Tobruk could jointly decide on NOC, which indeed funded both sides, as well as General Haftar’s troops.
Nevertheless Al-Sarraj’s move, designed to withdraw all financial support from his opponents, was not successful.
On March 25 last, just one day after the declaration of the GNA leader, the five permanent members of the UN Security Council issued a joint statement in which Sanalla’s position in favour of NOC independence was maintained.
Hence, also for the traditional supporters of the GNA and its President, al-Sarraj, the latter is no longer the only possible counterpart in Libya’s political scenario.
Therefore Russia jumped at the opportunity: on March 30, after a meeting in Jordan between al-Sarraj himself and the Russian Vice-Foreign Minister, Bogdanov, Russia said: “We need comprehensive negotiations among all the parties concerned”.
Hence Russia stands as the only mediator and broker between all Libyan factions, so as to keep the country united (a primary interest for Russia) and fill the void that the inept and idealistic West has created by betting only on al-Sarraj.
Therefore the even more inept al-Sarraj lost the support of the only international body legitimizing him, namely the United Nations, and created an opportunity for Russia to mediate between all the parties involved, thus becoming the only arbiter of Libya’s future.
The European Union and Italy do not seem yet to have noticed the new situation which has emerged in Libya, while their only point of reference, namely the GNA leader, al-Sarraj, is losing power. Russia is entering onto the whole Libyan scene, not only the Cyrenaica region of the Tobruk-based government, already supported by it, but also directly into the “Operation Dignity” of General Haftar, whose forces are now trained and supported by Russia.
The two NOC old factions, namely Tripoli’s and the other one based in Al-Bajda, have always fought each other and the plan of al-Sarraj’s GNA to gradually reduce the weight of the Tripoli-based NOC and the Al-Bajda-based NOC has been lasting for long time.
Initially, the Tobruk-based government had planned to take control over all the three Libyan financial organizations based in Tripoli: NOC, the Central Bank of Libya and the Libyan Investment Authority.
Although the Tobruk-based government appointed new managers for the three major Libyan companies, they have all chosen the line of autonomy, so as to continue operating legally on international markets and avoid excessive costs arising from the support of one single armed faction.
Since the beginning of civil war, the Libyan National Bank has adopted the budget for the two main parties involved autonomously, by also refusing to consider the demands drawn up by the two governments.
Hence NOC has transferred its earnings only to the Central Bank of Libya, which pays almost all public salaries.
Furthermore, the Tobruk-based government has not tried to officially separate its Al-Bajda-based NOC from the Tripoli-based one, but it has tried in every way to bring in foreign companies and transport companies in Libya and later make the agreements be signed only by the Al-Bajda-based NOC.
In this way the “new” Tobruk-based NOC has honoured all the international agreements reached before March 2015, the date marking the informal separation between the two NOCs, but it does not accept any subsequent contract, such as the very important one signed with Glencore by the primary Tripoli-based NOC.
It is an agreement giving to the Anglo-Swiss company the rights on the crude oil extracted from the Sarir and Messla oil fields up to the Marsa al-Hariga oil terminal near Tobruk.
At that juncture, the political and industrial choice made by the Al-Bajda-based NOC was to extract oil on its own and make it reach oil terminals.
For the time being, there is only an agreement under discussion, with an Egyptian company, but the Al-Bajda-based NOC claims it has negotiations underway with at least 40 other extraction companies which, however, are all small companies located in the Middle East.
One of the problems to be solved was also the one relating to Ibrahim Jadhran, the former Commander of the Petroleum Defense Guards.
Now Haftar has definitely taken possession of the terminals in the Libyan “oil crescent” and it has knocked out Jadhran and his Petroleum Defense Guards but, in 2014, the Head of the Petroleum Defense Guards and of the “Cyrenaica Self-Defense Force” had tried to sell oil on his own, with the only tough resistance put up by the United States.
Moreover, from August 2013 to April 2014, the Al-Bajda-based NOC – at the time still formally united with the Tripoli-based one – had tried to block ports, thus finally receiving the guarantee – by the then President al-Thinni, the current Head of the Tobruk-based Parliament – to decentralize the joint NOC and move it eastwards.
Considering that currently al-Sarraj’s attack on the only NOC which realistically works, namely the Tripoli-based one, has failed, a new oil-based Russian policy is shaping in Libya.
It is worth recalling that Russia was already present in Libya, shortly before Gaddafi’s fall in 2011, with two companies, namely Gazpromneft and Tatneft.
Rosneft always works much in the Middle East and it has recently acquired major research activities in Iraq, as well as 30% of the offshore extraction activities of Zohr, in Egyptian waters.
Hence the Russian support to Haftar regards the ability of the “Operation Dignity” forces to effectively control the wells and the terminals of the Libyan “oil crescent”.
With the likely presence of its special forces in Benghazi, Russia currently sees the real possibility of ensuring both the Libyan oil and its new presence in the Mediterranean basin, with a future military base in Cyrenaica.
Today we can only imagine to what extent the presence of a Russian military base on the Libyan coast would change the NATO strategy.
Conversely, if – as happened in Syria – Russia’s presence steps up the clash between factions in Libya, Europe’s geopolitical destabilization is a matter of time.
Now that Haftar has taken hold of oil terminals, he may decide to keep on cooperating with the Tripoli-based NOC – as he did in the past – or manage the oil transit and sale on his own, by distributing the proceeds according to his political interests.
Sanalla has also asked for the creation of new independent “Petroleum Defense Guards” by “Operation Dignity”, while the East-based Parliament has reaffirmed its clear non-involvement in al-Sarraj’s GNA.
Hence an ever more evident rift between Eastern and Western Libya with the oil network in the hands of Haftar, who is linked to the Tobruk-based government, but can easily become independent from both political camps, by playing exactly on control over oil terminals.
He is supported by Al Sisi’s Egypt, by the Russian Federation, the United Arab Emirates and Saudi Arabia. If Haftar won without the support and a sound agreement with the EU, they would kick most European companies out of the Libyan oil system.
“Today Saudi Arabia finally lost the war on Yemen.”
On August 17th, an anonymous German intelligence analyst who has perhaps the world’s best track-record of publicly identifying and announcing historical turning-points, and who is therefore also a great investigative journalist regarding international relations (especially military matters, which are his specialty) headlined at his “Moon of Alabama” blog, “Long Range Attack On Saudi Oil Field Ends War On Yemen”, and he opened:
Today Saudi Arabia finally lost the war on Yemen. It has no defenses against new weapons the Houthis in Yemen acquired. These weapons threaten the Saudis economic lifelines. This today was the decisive attack:
Drones launched by Yemen’s Houthi rebels attacked a massive oil and gas field deep inside Saudi Arabia’s sprawling desert on Saturday, causing what the kingdom described as a “limited fire” in the second such recent attack on its crucial energy industry. …
The Saudi acknowledgement of the attack came hours after Yahia Sarie, a military spokesman for the Houthis, issued a video statement claiming the rebels launched 10 bomb-laden drones targeting the field in their “biggest-ever” operation. He threatened more attacks would be coming.
New drones and missiles displayed in July 2019 by Yemen’s Houthi-allied armed forces
Today’s attack is a check-mate move against the Saudis. Shaybah is some 1,200 kilometers (750 miles) from Houthi-controlled territory. There are many more important economic targets within that range. …
The attack conclusively demonstrates that the most important assets of the Saudis are now under threat. This economic threat comes on top of a seven percent budget deficit the IMF predicts for Saudi Arabia. Further Saudi bombing against the Houthi will now have very significant additional cost that might even endanger the viability of the Saudi state. The Houthi have clown prince Mohammad bin Salman by the balls and can squeeze those at will.
He went on to say that the drones aren’t from Iran but are copies from Iran’s, “assembled in Yemen with the help of Hizbullah experts from Lebanon.”
He has been predicting for a long time that this war couldn’t be won by Crown Prince Mohammed bin Salman al-Saud (MbS). In the present report, he says:
The war on Yemen that MbS started in March 2015 long proved to be unwinnable. Now it is definitely lost. Neither the U.S. nor the Europeans will come to the Saudis help. There are no technological means to reasonably protect against such attacks. Poor Yemen defeated rich Saudi Arabia.
The Saudi side will have to agree to political peace negotiations. The Yemeni demand for reparation payments will be eye watering. But the Saudis will have no alternative but to cough up whatever the Houthi demand.
The UAE was smart to pull out of Yemen during the last months.
If he is correct (and I have never yet found a prediction from him turn out to have been wrong), then this will be an enormous blow to the foreign markets for U.S.-made weapons, since the Sauds are the world’s largest foreign purchasers of those, and have spent profusely on them — and also on U.S. personnel to train their soldiers how to use them. So (and this is my prediction, not his), August 19th might be a good time to sell short U.S. armament-makers such as Lockheed Martin.
However: his prediction that “the Saudis will have no alternative but to cough up whatever the Houthi demand” seems to me to be the first one from him that could turn out to have been wrong. If the Sauds have perpetrated, say, $200 billion of physical damage to Yemen, but refuse to pay more than $100 billion in reparations, and the Housis then hit and take out a major Saudi oil well, isn’t it possible that the Sauds would stand firm? But if they do, then mightn’t it be wrong to say, at the present time, that: “Today Saudi Arabia finally lost the war on Yemen.”? He has gone out on limbs before, and I can’t yet think of any that broke under him. Maybe this one will be the first? I wouldn’t bet on that. But this one seems to me to be a particularly long limb. We’ll see!
The message behind the release of Iranian oil tanker
The Gibraltar court ordered the Iranian oil tanker Grace 1 to be released. The tanker was seized by the British Royal Marines about a month ago.
This verdict was the ending of an elaborate game designed by John Bolton National Security Advisor of the United States and Mike Pompeo, carried out by the Britain government.
With seizing the tanker, Bolton was trying to put psychological and political pressures on Iran and force other countries to form a consensus against Iran, but he couldn’t fulfill any of these goals.
Iran’s firm, logical and wise answer to the seizure of Grace 1 (like making solid legal arguments) and the seriousness of our country’s armed forces in giving a proper response to Britain’s contemptuous act, made the White House lose the lead on reaching its ends.
Washington imagined that the seizure of Grace 1 will become Trump’s winning card against Iran, but the release of the tanker (despite disagreement of the U.S.) became another failure for the White House in dealing with Iran.
Obviously, London was also a total loser in this game. It is worth noting that U.S. was so persistent about keeping the oil tanker in custody that John Bolton traveled to London and insisted on British officials to continue the seizure of the ship. Their failure, however, clearly shows that the White House and its traditional ally, Britain, have lost a big part of their power in their relations with Iran.
Clearly, the illegal seizure of the Iranian oil tanker by Britain proceeded by the seizure of a British tanker by Iran and the following interactions between the two countries is not the whole story and there is more to it that will be revealed in coming days.
What we know for sure is that London has to pay for its recent anti-Iran plot in order to satisfy Washington; the smallest of these consequences was that Britain lost some of its legal credibility in international arena as it illegally captured an Iranian oil tanker.
The order of the Gibraltarian court revealed that London had no legal right to seize the Iranian oil tanker and nobody can defend this unlawful action. Surely, Iran will take all necessary legal actions to further pursue the matter.
In this situation, the Islamic Republic of Iran is firm on its position that it doesn’t have to follow the sanctions imposed by the European Union on other countries (including Syria).
No entity can undermine this argument as it is based on legal terms; therefore, Iran will keep supporting Syrian nation and government to fight terrorism. This is the strategic policy of the Islamic Republic and will not be changed under the pressure or influence of any other third country.
Finally, it should be noted that the release of Grace 1 oil tanker was not only a legal and political failure for Washington and London and their allies but it was also a strategic failure. Undoubtedly, the vast consequences of this failure will be revealed in near future.
From our partner Tehran Times
Business and boxing: two sides of the same coin
What do a planned US$15 billion Saudi investment in petroleum-related Indian businesses and a controversial boxing championship have in common?
Both reflect a world in which power and economics drive policy, politics and business at the expense of fundamental rights.
And both underscore an emerging new world order in which might is right, a jungle in which dissenters, minorities and all other others are increasingly cornered and repressed.
Rather than furthering stability by building inclusive, cohesive societies both support trends likely to produce an evermore unstable and insecure world marked by societal strife, mass migration, radicalization and violence.
A world in which business capitalizes on decisions by a critical mass of world leaders who share autocratic, authoritarian and illiberal principles of governance and often reward each other with lucrative business deals for policies that potentially aggravate rather than reduce conflict.
No doubt, the planned acquisition by Saudi Arabia’s state-owned national oil company Aramco of 20 percent of the petroleum-related businesses of Reliance Industries, one of India’s biggest companies, makes commercial and strategic economic and business sense.
Yet, there is equally little doubt that the announcement of the acquisition will be read by Indian prime minister Narendra Modi, days after he scrapped the autonomous status of the troubled, majority Muslim region of Kashmir, as a license to pursue his Hindu nationalist policies that discriminate against Muslims and other minorities and fuel tensions with Pakistan, the subcontinent’s other nuclear power.
The ultimate cost of the fallout of policies and business deals that contribute or give license to exclusion rather than inclusion of all segments of a population and aggravate regional conflict could be far higher than the benefits accrued by the parties to a deal.
Underscoring the risk of exclusionary policies and unilateral moves, cross border skirmishes between Indian and Pakistani forces erupted this week along the Kashmiri frontier in which at least five people were killed.
The timing of the announcement of the Aramco Reliance deal in a global environment in which various forms of racism and prejudice, including Islamophobia, are on the rise, assures Indian political and business leaders that they are unlikely to pay an immediate price for policies that sow discord and risk loss of life.
Like in the case of Saudi and Muslim acquiescence in China’s brutal clampdown on Turkic Muslims in the troubled, north-western Chinese province of Xinjiang, the most frontal assault on a faith in recent history, the announcement risks convincing embattled Muslim minorities like the Uighurs, the Kashmiris or Myanmar’s Rohingya who are lingering in refugee camps in Bangladesh that they are being hung out to dry.
To be sure, Kashmiris can count on the support of Pakistan but that is likely to be little more than emotional, verbal and political.
Pakistan is unlikely to risk blacklisting by the Financial Action Task Force (FATF), an international anti-money laundering and terrorism finance watchdog, at its next scheduled meeting in October by unleashing its anti-Indian militants.
Anthony Joshua’s controversial fight with Andy Ruiz scheduled for December in Saudi Arabia, the first boxing championship to be held in the Middle East, pales in terms of its geopolitical or societal impact compared to the Saudi Indian business deal.
Fact is that Saudi Arabia’s hosting of the championship has provoked the ire of activists rather than significant population groups. The fight is furthermore likely to be seen as evidence and a strengthening of Crown Prince Mohammed bin Salman’s selective efforts to socially liberalize the once austere kingdom.
Nonetheless, it also reinforces Prince Mohammed’s justified perception that Saudi Arabia can get away with imprisoning activists who argued in favour of his reforms as well as the lack of transparency on judicial proceedings against the alleged perpetrators of the killing of journalist Jamal Khashoggi in the Saudi consulate in Istanbul. Saudi Arabia insists the killing was perpetrated by rogue operatives.
What Saudi investment in India and the scheduled boxing championship in the kingdom have in common is that both confirm the norms of a world in which ‘humane authority,’ a concept developed by prominent Chinese international relations scholar Yan Xuetong, is a rare quantity.
Mr. Yan employs the concept to argue without referring to President Xi Jinping, Xinjiang, China’s aggressive approach towards the South China Sea or its policy towards Taiwan and Hong Kong that China lacks the humane authority to capitalize on US President Donald J. Trump’s undermining of US leadership.
Mr. Yan defines a state that has humane authority as maintaining strategic credibility and defending the international order by becoming an example through adherence to international norms, rewarding states that live up to those norms and punishing states that violate them. Garnering humane authority enables a state to win allies and build a stable international order.
Mr. Yan’s analysis is as applicable to India and Saudi Arabia as it is to China and others that tend towards civilizational policies like the United States, Russia, Hungary and Turkey.
It is equally true for men like Anthony Joshua promoter Eddie Hearn and business leaders in general.
To be sure, Aramco is state-owned and subject to government policy. Nonetheless, as it prepares for what is likely to be the world’s largest initial public offering, even Aramco has to take factors beyond pure economic and financial criteria into account.
At the end of the day, the consequence of Mr. Yan’s theory is that leadership, whether geopolitical, economic or business, is defined as much by power and opportunity as it is by degrees of morality and ethics.
Failure to embrace some notion of humane authority and reducing leadership and business decisions to exploiting opportunity with disregard for consequences or the environment in which they are taken is likely to ultimately haunt political and business leaders alike.
Said Mr. Yan: “Since the leadership of a humane authority is able to rectify those states that disturb the international order, the order based on its leadership can durably be maintained.”
What is true for political leaders is also true for business leaders even if they refuse to acknowledge that their decisions have as much political as economic impact.
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