Libya’s National Oil Corporation (NOC) hopes oil production will resume after international talks to end a blockade by eastern-based forces, which has stopped almost all energy exports for six months, it said on Monday.
The forces shut down Libya’s oil production in January, putting financial pressure on the internationally recognised government in Tripoli, in the west, but also cutting off revenue for state institutions operating across the country.
A possible deal to allow production to restart would involve a new agreement on distributing oil revenue, as well as guarantees on field security, a person familiar with the matter said.
Ending the blockade could also make it easier to agree to a ceasefire, with Libya’s warring sides and their foreign backers continuing to mobilise forces around the coastal city of Sirte.
Libya has been split since 2014 between rival factions in Tripoli, home to the internationally recognised Government of National Accord (GNA), and in the east, where Khalifa Haftar’s Libyan National Army (LNA) holds sway.
Though an eastern government aligned with Haftar has set up parallel institutions, international agreements say only the NOC in Tripoli can produce and export oil, with revenue channelled through the Central Bank of Libya (CBL) in the capital.
The eastern administration and its foreign supporters want oil revenue to flow to it directly, rather than through the CBL. Diplomats say the east has attempted to export oil directly, in breach of those rules, during the blockade.
This year Turkish backing has helped the GNA suddenly regain control of most of the northwest, after beating back a 14-month assault on the capital by the LNA, which is backed by the United Arab Emirates, Russia and Egypt.
The LNA still controls the east and south, including most major oil fields and export terminals.
After the GNA’s gains this month, NOC attempted to reopen Sharara and El Feel oil fields, before armed groups stopped it. Last week it said Russian mercenaries had occupied Sharara.
There have been negotiations in recent weeks between NOC, the GNA and regional countries, overseen by the United Nations and United States, an NOC spokesman said.
“We are hopeful that those regional countries will lift the blockade and allow us to resume our work,” the spokesman said.
The GNA says the LNA is behind the blockade, which was announced in January by local groups including tribes. The LNA says the tribes imposed the blockade themselves.
On Monday, some of the tribes said in a statement that they were reopening the oil fields and handing authority to negotiate a resumption in output to the LNA, a possible sign that the deal is close to agreement.
An LNA spokesman said on television that it welcomed any popular mandate to protect the oilfields.
The NOC spokesman said the company would start producing oil again right away if workers’ security was guaranteed.
“We need to resume work immediately to save our infrastructure and the Libyan economy,” the spokesman said.
“NOC is determined that the agreement will guarantee transparency and that oil revenues will achieve social justice for all Libyans,” he said.