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Libya Risks Breakup Over Oil

Libya Risks Breakup Over OilLibya Risks Breakup Over Oil

Libya's self-proclaimed prime minister has warned that attempts by a rival government in the east to assert control over the oil industry could escalate the political conflict dividing the OPEC member state and force it to break in two.

Libya has had two governments competing for power since August when a group called Operation Libya Dawn seized Tripoli and forced the elected Prime Minister Abdullah al-Thinni to flee 1,000 km to a small city near the border with Egypt, according to Reuters.

Both sides have so far avoided talking publicly about prospect of a split.

The warning by Omar al-Hassi, prime minister of the rival government, came after Thinni's government claimed air strikes on Tripoli's Mitigate airport this week, escalating a confrontation that started with an attack by Libya Dawn on a rival force in Tripoli in July.

The new rulers in the capital are not recognized by the United Nations and world powers but have taken over ministries, oil facilities, airports and much of western and central Libya.

In a step to assert control over the oil industry, Thinni's government said on Wednesday it had appointed a new chairman of the National Oil Corp. Thinni had initially retained the state oil firm's previous head, Mustafa Sanallah, but he remains in Tripoli.

The conflict gripping Libya three years after the overthrow of Muammar Gaddafi poses a legal dilemma for oil traders, who are left wondering who owns Libya's oil exports, worth more that $10 billion a year. The country sits on Africa's largest oil reserves.

"Libya's oil has become part of the war," Hassi told Reuters in an interview. "We had hoped that oil would not be part of this conflict."

Hassi said Libya might break up if the international community allowed Thinni to appoint its own NOC chairman and eventually form an eastern oil company.

Caption: A man stands by his car as black smoke billows across the sky after a petrol depot was set ablaze during clashes between rival militias near Tripoli's international airport, on the outskirts of the capital, on August 13.

 

Financialtribune.com