Crude oil is the mainstay of Libya’s economy. It is therefore good news for all Libyans that the National Oil Corporation signed an agreement to reintegrate eastern leadership under a unified, independent management structure. If implemented, the agreement could rejuvenate Libya’s economy and benefit all Libyans.
In Libya, oil is king, with 90 percent of government revenues generated by oil production. The National Oil Corporation and its subsidiaries traditionally controlled a vast majority of the country’s oil output and infrastructure, including oilfields, pipelines, refineries and production facilities.
It is not surprising that once the alliance that ousted long-time dictator Muammar Qadhafi and his regime splintered, and began to fight among themselves over territory and resources, Libya’s oil production plummeted. Oil infrastructure suffered frequent attacks by factional forces, as well as by Da’esh and other violent extremists, hindering production and closing export terminals and ports.
Over time, certain Libyan entities not recognized by the international community attempted to export oil illegally. Because Libya's resources belong to all of its people, not just those few who can get their hands on them, the UN Security Council passed a resolution condemning such illicit sales, and called on member states to take all necessary steps to prevent vessels carrying illicit Libyan oil from entering their ports.
On July 6th, the Governments of France, Germany, Italy, Spain, the United Kingdom and the United States issued a joint statement on Libya welcoming and supporting the agreement to reunify the National Oil Corporation, stating, “We urge all Libyans to work together to restore Libya’s oil production and exports, and stress the importance of Libyan resource wealth being used for the benefit of all Libyans.”
The six governments pledged to use all means necessary, at the request of Libya’s Government of National Accord, to stop the illegal shipment of oil from Libya and to sanction those who would exploit or divert Libya’s oil or wealth.
“Libya’s national economic institutions, including the National Oil Corporation, must remain united under the sole stewardship of the Government of National Accord, and must use Libya’s resources for the benefit of all Libyans.”