Oil Won't Save Libya

Aug 4, 2016 | George Ward
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Libya is precariously split between several factions vying for control. The UN-backed Government of National Accord, also called the unity government, formed in early 2016 and operates from Tripoli. The GNA faces an opposition body based in Tobruk, which collaborates with General Khalifa Hifter and his Libyan National Army (LNA). A third group, located south of Sirte, includes the remnants of the General National Congress (GNC) and several Islamist groups. Other unassociated militias hold territory across the country, including ISIS. Before Qaddafi’s undoing in 2011, Libya produced over 1.6 million barrels of oil per day, which generated most government revenues. Today, the country’s output is less than a quarter of that level—the oil sector is in shambles.

Libya is in disarray; the country is simply not ready to revamp the oil industry. The unity government is scrambling for consensus, while competing factions jockey for control of key oil infrastructure. Even if the political actors came to an agreement, the national oil company (NOC) faces technical challenges and the GNA must show it has the influence to effectively manage oil revenues. Increasing oil revenues will prove a daunting task.