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Fayez al-Sarraj’s attempt to take hold of NOC

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[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.

Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France. “

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Turkey and Iran find soft power more difficult than hard power

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The times they are a changin’. Iranian leaders may not be Bob Dylan fans, but his words are likely to resonate as they contemplate their next steps in Iraq, Iraqi Kurdistan, Lebanon, and Azerbaijan.

The same is true for Turkish President Recep Tayyip Erdogan. The president’s shine as a fierce defender of Muslim causes, except for when there is an economic price tag attached as is the case of China’s brutal crackdown on Turkic Muslims, has been dented by allegations of lax defences against money laundering and economic mismanagement.

The setbacks come at a time that Mr. Erdogan’s popularity is diving in opinion polls.

Turkey this weekend expelled the ambassadors of the US, Canada, France, Finland, Denmark, Germany, Netherlands, New Zealand, Norway, and Sweden for calling for the release of philanthropist and civil rights activist Osman Kavala in line with a European Court of Human Rights decision.

Neither Turkey nor Iran can afford the setbacks that often are the result of hubris. Both have bigger geopolitical, diplomatic, and economic fish to fry and are competing with Saudi Arabia and the UAE as well as Indonesia’s Nahdlatul Ulama for religious soft power, if not leadership of the Muslim world.

That competition takes on added significance in a world in which Middle Eastern rivals seek to manage rather than resolve their differences by focusing on economics and trade and soft, rather than hard power and proxy battles.

In one recent incident Hidayat Nur Wahid, deputy speaker of the Indonesian parliament, opposed naming a street in Jakarta after Mustafa Kemal Ataturk, the general-turned-statemen who carved modern Turkey out of the ruins of the Ottoman empire. Mr. Wahid suggested that it would be more appropriate to commemorate Ottoman sultans Mehmet the Conqueror or Suleiman the Magnificent or 14th-century Islamic scholar, Sufi mystic, and poet Jalaludin Rumi.

Mr. Wahid is a leader of the Muslim Brotherhood-linked Prosperous Justice Party (PKS) and a board member of the Saudi-run Muslim World League, one of the kingdom’s main promoters of religious soft power.

More importantly, Turkey’s integrity as a country that forcefully combats funding of political violence and money laundering has been called into question by the Financial Action Task Force (FATF), an international watchdog, and a potential court case in the United States that could further tarnish Mr. Erdogan’s image.

A US appeals court ruled on Friday that state-owned Turkish lender Halkbank can be prosecuted over accusations it helped Iran evade American sanctions.

Prosecutors have accused Halkbank of converting oil revenue into gold and then cash to benefit Iranian interests and documenting fake food shipments to justify transfers of oil proceeds. They also said Halkbank helped Iran secretly transfer US$20 billion of restricted funds, with at least $1 billion laundered through the US financial system.

Halkbank has pleaded not guilty and argued that it is immune from prosecution under the federal Foreign Sovereign Immunities Act because it was “synonymous” with Turkey, which has immunity under that law. The case has complicated US-Turkish relations, with Mr.  Erdogan backing Halkbank’s innocence in a 2018 memo to then US President Donald Trump.

FATF placed Turkey on its grey list last week. It joins countries like Pakistan, Syria, South Sudan, and Yemen that have failed to comply with the group’s standards. The International Monetary Fund (IMF) warned earlier this year that greylisting would affect a country’s ability to borrow on international markets,  and cost it an equivalent of up to 3 per cent of gross domestic product as well as a drop in foreign direct investment.

Mr. Erdogan’s management of the economy has been troubled by the recent firing of three central bank policymakers, a bigger-than-expected interest rate cut that sent the Turkish lira tumbling, soaring prices, and an annual inflation rate that last month ran just shy of 20 per cent. Mr. Erdogan has regularly blamed high-interest rates for inflation.

A public opinion survey concluded in May that 56.9% of respondents would not vote for Mr. Erdogan and that the president would lose in a run-off against two of his rivals, Ankara Mayor Mansur Yavas and his Istanbul counterpart Ekrem Imamoglu.

In further bad news for the president, polling company Metropoll said its September survey showed that 69 per cent of respondents saw secularism as a necessity while 85.1 per cent objected to religion being used in election campaigning.

In Iran’s case, a combination of factors is changing the dynamics of Iran’s relations with some of its allied Arab militias, calling into question the domestic positioning of some of those militias, fueling concern in Tehran that its detractors are encircling it, and putting a dent in the way Iran would like to project itself.

A just-published report by the Combatting Terrorism Center at the US Military Academy West Point concluded that Iran’s Islamic Revolutionary Guards Corps (IRGC) faced “growing difficulties in controlling local militant cells. Hardline anti-US militias struggle with the contending needs to de-escalate US-Iran tensions, meet the demands of their base for anti-US operations, and simultaneously evolve non-kinetic political and social wings.”

Iranian de-escalation of tensions with the United States is a function of efforts to revive the defunct 2015 international agreement to curb Iran’s nuclear program and talks aimed at improving relations with Saudi Arabia even if they have yet to produce concrete results.

In addition, like in Lebanon, Iranian soft power in Iraq has been challenged by growing Iraqi public opposition to sectarianism and Iranian-backed Shiite militias that are at best only nominally controlled by the state.

Even worse, militias, including Hezbollah, the Arab world’s foremost Iranian-supported armed group, have been identified with corrupt elites in Lebanon and Iraq. Many in Lebanon oppose Hezbollah as part of an elite that has allowed the Lebanese state to collapse to protect its vested interests.

Hezbollah did little to counter those perceptions when the group’s leader, Hassan Nasrallah, threatened Lebanese Christians after fighting erupted this month between the militia and the Lebanese Forces, a Maronite party, along the Green Line that separated Christian East and Muslim West Beirut during the 1975-1990 civil war.

The two groups battled each other for hours as Hezbollah staged a demonstration to pressure the government to stymie an investigation into last year’s devastating explosion in the port of Beirut. Hezbollah fears that the inquiry could lay bare pursuit of the group’s interests at the expense of public safety.

“The biggest threat for the Christian presence in Lebanon is the Lebanese Forces party and its head,” Mr. Nasrallah warned, fuelling fears of a return to sectarian violence.

It’s a warning that puts a blot on Iran’s assertion that its Islam respects minority rights, witness the reserved seats in the country’s parliament for religious minorities. These include Jews, Armenians, Assyrians and Zoroastrians.

Similarly, an alliance of Iranian-backed Shiite militias emerged as the biggest loser in this month’s Iraqi elections. The Fateh (Conquest) Alliance, previously the second-largest bloc in parliament, saw its number of seats drop from 48 to 17.

Prime Minister Mustafa al-Kadhimi brought forward the vote from 2022 to appease a youth-led protest movement that erupted two years ago against corruption, unemployment, crumbling public services, sectarianism, and Iranian influence in politics.

One bright light from Iran’s perspective is the fact that an attempt in September by activists in the United States to engineer support for Iraqi recognition of Israel backfired.

Iran last month targeted facilities in northern Iraq operated by Iranian opposition Kurdish groups. Teheran believes they are part of a tightening US-Israeli noose around the Islamic republic that involves proxies and covert operations on its Iraqi and Azerbaijani borders.

Efforts to reduce tension with Azerbaijan have failed. An end to a war of words that duelling military manoeuvres on both sides of the border proved short-lived. Azerbaijani President Ilham Aliyev, emboldened by Israeli and Turkish support in last year’s war against Armenia, appeared unwilling to dial down the rhetoric.

With a revival of the nuclear program in doubt, Iran fears that Azerbaijan could become a staging pad for US and Israeli covert operations. Those doubts were reinforced by calls for US backing of Azerbaijan by scholars in conservative Washington think tanks, including the Hudson Institute and the Heritage Foundation.

Eldar Mamedov, a political adviser for the social-democrats in the Foreign Affairs Committee of the European Parliament, warned that “the US government should resist calls from hawks to get embroiled in a conflict where it has no vital interest at stake, and much less on behalf of a regime that is so antithetical to US values and interests.”

He noted that Mr. Aliyev has forced major US NGOs to leave Azerbaijan, has trampled on human and political rights, and been anything but tolerant of the country’s Armenian heritage.

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Process to draft Syria constitution begins this week

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The process of drafting a new constitution for Syria will begin this week, the UN Special Envoy for the country, Geir Pedersen, said on Sunday at a press conference in Geneva.

Mr. Pedersen was speaking following a meeting with the government and opposition co-chairs of the Syrian Constitutional Committee, who have agreed to start the process for constitutional reform.

The members of its so-called “small body”, tasked with preparing and drafting the Constitution, are in the Swiss city for their sixth round of talks in two years, which begin on Monday. 

Their last meeting, held in January, ended without progress, and the UN envoy has been negotiating between the parties on a way forward.

“The two Co-Chairs now agree that we will not only prepare for constitutional reform, but we will prepare and start drafting for constitutional reform,” Mr. Pedersen told journalists.

“So, the new thing this week is that we will actually be starting a drafting process for constitutional reform in Syria.”

The UN continues to support efforts towards a Syrian-owned and led political solution to end more than a decade of war that has killed upwards of 350,000 people and left 13 million in need of humanitarian aid.

An important contribution

The Syrian Constitutional Committee was formed in 2019, comprising 150 men and women, with the Government, the opposition and civil society each nominating 50 people.

This larger group established the 45-member small body, which consists of 15 representatives from each of the three sectors.

For the first time ever, committee co-chairs Ahmad Kuzbari, the Syrian government representative, and Hadi al-Bahra, from the opposition side, met together with Mr. Pedersen on Sunday morning. 

He described it as “a substantial and frank discussion on how we are to proceed with the constitutional reform and indeed in detail how we are planning for the week ahead of us.”

Mr. Pedersen told journalists that while the Syrian Constitutional Committee is an important contribution to the political process, “the committee in itself will not be able to solve the Syrian crisis, so we need to come together, with serious work, on the Constitutional Committee, but also address the other aspects of the Syrian crisis.”

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North Africa: Is Algeria Weaponizing Airspace and Natural Gas?

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In a series of shocking and unintelligible decisions, the Algerian Government closed its airspace to Moroccan military and civilian aircraft on September 22, 2021, banned French military planes from using its airspace on October 3rd, and decided not to renew the contract relative to the Maghreb-Europe gas pipeline, which goes through Morocco and has been up and running since 1996–a contract that comes to end on October 31.

In the case of Morocco, Algeria advanced ‘provocations and hostile’ actions as a reason to shut airspace and end the pipeline contract, a claim that has yet to be substantiated with evidence. Whereas in the case of France, Algeria got angry regarding visa restrictions and comments by French President Emmanuel Macron on the Algerian military grip on power and whether the North African country was a nation prior to French colonization in 1830.

Tensions for decades

Algeria has had continued tensions with Morocco for decades, over border issues and over the Western Sahara, a territory claimed by Morocco as part of its historical territorial unity, but contested by Algeria which supports an alleged liberation movement that desperately fights for independence since the 1970s.

With France, the relation is even more complex and plagued with memories of colonial exactions and liberation and post-colonial traumas, passions and injuries. France and Algeria have therefore developed, over the post-independence decades, a love-hate attitude that quite often mars otherwise strong economic and social relations.

Algeria has often reacted to the two countries’ alleged ‘misbehavior’ by closing borders –as is the case with Morocco since 1994—or calling its ambassadors for consultations, or even cutting diplomatic relations, as just happened in August when it cut ties with its western neighbor.

But it is the first-time Algeria resorts to the weaponization of energy and airspace. “Weaponization” is a term used in geostrategy to mean the use of goods and commodities, that are mainly destined for civilian use and are beneficial for international trade and the welfare of nations, for geostrategic, political and even military gains. As such “weaponization” is contrary to the spirit of free trade, open borders, and solidarity among nations, values that are at the core of common international action and positive globalization.

What happened?

Some observers advance continued domestic political and social unrest in Algeria, whereby thousands of Algerians have been taking to the streets for years to demand regime-change and profound political and economic reforms. Instead of positively responding to the demands of Algerians, the government is probably looking for desperate ways to divert attention and cerate foreign enemies as sources of domestic woes. Morocco and France qualify perfectly for the role of national scapegoats.

It may be true also that in the case of Morocco, Algeria is getting nervous at its seeing its Western neighbor become a main trade and investment partner in Africa, a role it can levy to develop diplomatic clout regarding the Western Sahara issue. Algeria has been looking for ways to curb Morocco’s growing influence in Africa for years. A pro-Algerian German expert, by the name of Isabelle Werenfels, a senior fellow in the German Institute for International and Security Affairs, even recommended to the EU to put a halt to Morocco’s pace and economic clout so that Algeria could catch up. Weaponization may be a desperate attempt to hurt the Moroccan economy and curb its dynamism, especially in Africa.

The impact of Algeria’s weaponization of energy and airspace on the Moroccan economy is minimal and on French military presence in Mali is close to insignificant; however, it shows how far a country that has failed to administer the right reforms and to transfer power to democratically elected civilians can go.

In a region, that is beleaguered by threats and challenges of terrorism, organized crime, youth bulge, illegal migration and climate change, you would expect countries like Algeria, with its geographic extension and oil wealth, to be a beacon of peace and cooperation. Weaponization in international relations is inacceptable as it reminds us of an age when bullying and blackmail between nations, was the norm. The people of the two countries, which share the same history, language and ethnic fabric, will need natural gas and unrestricted travel to prosper and grow and overcome adversity; using energy and airspace as weapons is at odds with the dreams of millions of young people in Algeria and Morocco that aspire for a brighter future in an otherwise gloomy economic landscape. Please don’t shatter those dreams!

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