Libya's oil politics: An emerging Turkey-UAE nexus?

The reshuffle of the National Oil Corporation's (NOC) leadership on 12 July was arguably the most significant recent development in Libya in terms of its implications for the current state of power dynamics among various actors.

The NOC is one of the few powerful institutions which has enjoyed a considerable level of autonomy from the relevant political authorities, especially in a post-revolutionary period that has been dominated by a power vacuum and extreme institutional fragmentation.

This has led to the NOC being incorrectly viewed as one of Libya’s sovereign institutions, which would entail the endorsement of both the Tobruk-based House of Representatives (HoR) and the Tripoli-based High Council of State (HCS) for any high-level administrative decisions.

"The reshuffle of the National Oil Corporation's leadership in July was arguably the most significant recent development in Libya in terms of its implications for the current state of power dynamics" 

The state oil firm, however, is legally subject to the jurisdiction of the executive, and these are the legal grounds on which the Government of National Unity (GNU) led by Prime Minister Abdul Hamid Dbeibah replaced the incumbent administration led by Chairman Mustafa Sanallah with a new one led by Farhat Bengdara.

For Dbeibah and the GNU, the move was about subordinating the NOC to their authority.

“Political and security, not technical and economic factors were behind the decision to replace Sanallah with Bengdara,” Ousama Assed, the founder and CEO of the Tripoli-based Strategic Path Consultancy, told The New Arab.

Sanallah’s intransigence when it came to transferring oil revenues to the government had been a real headache for the latter, triggering repeated flare-ups between Sanallah and the Oil and Gas Minister Mohammed Aoun over the past year. Aoun had even called for the sacking of Sanallah multiple times as a result of their disagreements.

The fact that the GNU is functioning without an approved government budget makes access to oil revenues essential for government spending and, hence, its own survival.

By installing Bengdara at the helm of the NOC, Dbeibah and the GNU not only solved the NOC’s ‘autonomy problem’, but also ensured the lifting of the blockade on oil production and exports imposed by Haftar-affiliated armed groups.

With the end of the blockade, oil production has quickly returned to pre-blockade levels of almost 1.2 million bpd, which will naturally be a lifeline for the GNU.

A Turkey-UAE nexus emerges

The influence of the United Arab Emirates (UAE) seems to have been key to this outcome. Abu Dhabi is constituting a nexus between Dbeibah, Bengdara, and Haftar-affiliated armed groups imposing the blockade. “The change at the helm of the NOC was a result of talks in the UAE,” Assed said. 

A former governor of the Central Bank of Libya (CBL) under Gaddafi, Bengdara is widely known as a figure close to Abu Dhabi. Bengdara’s affiliation with Abu Dhabi was underscored by his predecessor Sanallah during a fiery speech rejecting his replacement.

Likewise, Abu Dhabi’s close ties with both Haftar and the actors affiliated with him have been the steadiest element of the Libyan crisis since roughly 2014. Indeed, Dbeibah being on good terms with Abu Dhabi was the very thing making this ‘Abu Dhabi-sponsored’ line-up across the frontlines possible.

Nevertheless, it is not a completely rosy picture. “The current deal will test the limits of pragmatism,” Anas al-Gomati, founder and director of Sadeq Institute, Libya’s first independent public policy think-tank, told TNA.

“Dbeibah has been able to acquire [only] short-term influence in the oil sector”.

Regardless, there is no doubt that Abu Dhabi has achieved a considerable level of influence over the current political landscape by building a convergence between nominally disparate centres of gravity.

Ankara and Abu Dhabi have found themselves on opposite sides of the political and military conflict in Libya for almost a decade.

"Ankara and Abu Dhabi's convergence over the current power distribution in Libya makes them more prominent stakeholders than others in the nominal political landscape"

However, Dbeibah’s premiership has changed this dynamic, becoming a point of convergence between Ankara and Abu Dhabi by cultivating cordial relations with both.

As soon as it became clear that 24 December 2021 was not a viable date for elections, Ankara extended its unequivocal support to Dbeibah and the GNU by stating that it would continue recognising it as the legitimate government until elections are held.

Dbeibah maintained this position of being a point of union between Ankara and Abu Dhabi even in the face of the HoR-appointed rival PM Bashagha’s challenge to his premiership.

Moreover, when Dbeibah and the GNU were challenged head-on by Bashagha, Turkish President Recep Tayyip Erdogan made it clear that despite having close relations with Bashagha he would not favour the formation of another interim government, alluding to his implicit support for Dbeibah.

Likewise, when Bashagha challenged Dbeibah, Abu Dhabi did not invest in the former’s project, deviating from the approach of its usual partners such as Cairo, Paris, and Moscow in Libya and instead favouring Dbeibah.

The convergence between Ankara and Abu Dhabi over Dbeibah is also meaningful in light of the ongoing rapprochement between the two beyond Libya.

Although Ankara has initiated rapprochement efforts with other rival regional powers such as Israel, Saudi Arabia, and Egypt, none of those efforts have advanced and come to fruition in the same way as relations with Abu Dhabi.

Not only has Abu Dhabi already allocated budgets for investments in Turkey, but the two countries have also managed to converge on certain policy choices in areas such as Libya.

Ankara and Abu Dhabi’s convergence over the current power distribution in Libya makes them more prominent stakeholders than others in the nominal political landscape. However, this prominence is naturally and likely to trigger the mobilisation of a counter-coalition of Bashagha and his allies, with signs already emerging.

“Aguilah Saleh is putting pressure on Bashagha to move into Tripoli. Reports are that Saleh informed Bashagha that he shouldn’t remain in Sirte and operate from Tripoli, otherwise the HoR will vote him out of office,” analyst Ousama Assed said.

In western Libya, meanwhile, Dbeibah’s former military intelligence chief Osama Al-Juwaili has warned he would use armed force to install Bashaga in Tripoli, even threatening to take over the city.

Ultimately, the NOC’s leadership change has major implications for Libya’s power dynamics, forcing Bashagha and his allies to take a more aggressive stance in order to avoid falling into irrelevance.

Bilgehan Öztürk is a foreign policy researcher at SETA Foundation. His research interests include Turkish foreign and security policies in the MENA region, non-state armed actors, civil war, countering violent extremism, and Turkish-Russian relations. He is the co-author of the report 'Countering Violent Extremism in Libya'