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Libya's NOC Denounces Calls for Oil Blockade

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Libya's National Oil Corp. (NOC) denounced calls for a blockade of all Libyan crude oil ports ahead of a peace conference in Berlin on Jan. 19 that will seek an end to the North African country's nine-year civil war (IOD Jan.15'20). The state-owned company did not clarify which groups were calling for a blockade, but a senior Libyan industry source said the rumors pointed to eastern-based tribes, adding "we are almost sure the Libyan National Army (LNA) is behind it." Separately, Reuters reported on Friday that protesters in eastern Libya had entered the Zueitina oil terminal on Friday and announced its closure. Since last April, LNA forces led by renegade Gen. Khalifa Haftar have been trying to seize control of Libya's capital, Tripoli, from the UN-backed government of Prime Minister Fayez Serraj. The two sides are locked in a stalemate amid growing levels of foreign military involvement in recent months. The Berlin conference will aim to enforce a cease fire and revive stalled peace talks. "Blockading oil facilities is a criminal act, and a capital offence under Libyan law. If these threats are carried out, NOC will prosecute perpetrators to the fullest extent possible under Libyan and international law," NOC Chairman Mustafa Sanalla said in a statement. Libya's oil sector is constantly targeted by lawless militias with frequent disruptions of production and exports. The Opec member produced an average of 1.2 million barrels per day of crude last month. NOC booked revenues of $2.2 billion in December. Annual revenues of $22.5 billion for 2019 were down about 8% from $24.6 billion in 2018, the company reported this past week. Libya's civil war has seen increased levels of foreign military participation in recent months. Haftar's LNA is using Sudanese and Chadian fighters while Egypt, the United Arab Emirates and Jordan have all provided military and logistical support along with airstrikes. Egypt and the UAE do not want to see an Islamist government take over in Libya. France has also lent political support to Haftar's LNA, while Russian military contractor Wagner has provided military support to the LNA's offensive on Tripoli. On the other side, Turkey and Qatar have consistently supported Islamist militias and politicians in Tripoli and western Libya in line with their support for Islamic political groups across the region. Ankara has also recently dispatched up to 2,000 fighters from Idlib in northwest Syria to western Libya to shore up Serraj's forces defending the capital. NOC's Sanalla said if prolonged oil outages were to occur, it would lead to a collapse of the exchange rate, a huge and unsustainable increase in the national budget deficit, the departure of foreign contractors and the loss of future production, which could take years to restore. "This is like setting fire to your own house," he said. NOC has limited crude storage capacity available at its main ports. "If [the ports] are closed, we will need to reduce production immediately, and to shut down entirely when available storage is filled. That could be in as little as five days," said Sanalla. Tom Pepper, London

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