Customer Logins

Obtain the data you need to make the most informed decisions by accessing our extensive portfolio of information, analytics, and expertise. Sign in to the product or service center of your choice.

Customer Logins
Same-Day Analysis

Oil disruption increases likelihood of de facto eastern Libyan autonomy

Published: 28 August 2013

Libya's federalist movement claims to be orchestrating the labour- and protest-related disruption currently affecting the eastern hydrocarbon sector.

IHS Global Insight perspective



The addition of a political narrative on the disruption currently affecting Libya's oil and gas sector risks exacerbating the political divide between east and west.


Co-ordinated strikes at hydrocarbons facilities are likely to represent an attempt by the eastern federalist movement to access funds to support its project, bolstered by renewed momentum towards establishing a political and military command in the east.


Despite this, a sustained east-west conflict remains unlikely, with the continued trend of de facto autonomy in the east likely to be enshrined in an eventual constitution that falls just short of federalism.


Zawia oil refinery has been protected from fighting but its production has fully stopped.

The imposition of a political narrative by Libya's eastern federalist movement, represented by the Cyrenaica Transitional Council (CTC), on the August series of strikes by the Petroleum Facilities Guard (PFG) has complicated Libya's problem of widespread disruption to the oil and gas sector, which began in late 2012. The PFG, the body officially responsible for oilfield security, succeeded in shutting down all oil export operations in the east of Libya in mid-August.

Federalist movement

The PFG strikes coincided with the CTC vowing in early August to increase disruption at eastern oil facilities if the government failed to meet its demands of federal status for Libya's eastern Barqa (Cyrenaica) region. The CTC has to-date been unable to co-ordinate its hundreds of disparate factions to fulfil its political aims, and given the primacy of local content issues driving the bulk of the disruption it is unlikely that the CTC is currently able to orchestrate a sustained campaign of disruption to the eastern oil sector. Nonetheless, the fact that the striking PFG workers lent their support to calls for increased eastern autonomy has stoked tensions between the eastern federalists and the government in Tripoli. On 15 August, Prime Minister Ali Zidan accused the PFG of intending to sell the blockaded oil independently of the National Oil Corporation (NOC), allegedly to fund the federalist cause. He threatened the use of "any means", including air power, to prevent tankers loading unauthorised oil shipments, and ordered the Libyan Navy to enforce a blockade on three oil terminals at the heart of the dispute to prevent the illicit sale of oil (see Libya: 16 August 2013: Risks of fighting at oil export facilities increase as Libyan government threatens protesters). This was followed by unconfirmed reports on 22 August that Libyan Naval Special Forces, in the guise of the coastguard, had fired light weapons at an unauthorised tanker as it approached the Es Sider oil terminal.

The CTC declared Barqa as a self-governing region in early June, reflecting growing federalist sentiment in the east and mounting mistrust of the central government in Tripoli. The declaration mirrored a similar announcement in March 2012, when the council announced its intention to reactivate Libya's 1951 constitution and establish a parliament and government. Eastern leaders have become increasingly concerned about the government's perceived mismanagement of Libya's oil wealth and the armed interference in the political process in Tripoli by militias aligned with Misratah, embodied by the passage under duress in early May of the Political Isolation Law, which bars officials with past associations with the former regime of Muammar Ghadaffi from holding office (see Libya: 22 May 2013: Political Isolation Law threatens to decapitate Libyan state). Nonetheless, the General National Congress (GNC) has recognised the danger of rising eastern grievances, and has made a number of concessions in recent months, including the election of the constituent committee (tasked with drafting the new constitution) and moving the headquarters of the NOC from Tripoli to Benghazi. IHS has previously assessed that a serious commitment to self-rule by the CTC would include the appointment of a regional oil minister and interior minister, and the seizure of the NOC office and central bank in Benghazi by council-aligned forces. The tightening of de facto control over oil infrastructure through co-ordinated strike action would increase the likelihood of these indicators being triggered.

Generation Islamist

Changes to the leadership structure of the CTC in early August, which reduced the prominence of tribal elders and figurehead Ahmed Zubai Al-Senussi in favour of the council's more unified Islamist youth wing, are likely to make the council a more potent political force. The youth wing's programme calls for full autonomy for Barqa while maintaining the unity of a federal Libyan state. Retreading earlier ground, the youth movement re-declared the establishment of a defence force to protect Barqa and maintain security in the form of the so-called Barqa Army. There is no specific data on the Barqa Army, and an IHS source in Libya said that in reality the force is a quasi-alliance between various militias with competing agendas. This, the source said, means the army is yet to form a real, effective presence. Nonetheless, the assumption of control of the CTC by the more organised youth movement is likely to inject renewed energy into efforts to form a unified armed force, although this is unlikely to immediately translate into an effective presence on the ground.

With the CTC providing self-declared political leadership for the east (albeit leadership that does not enjoy universal eastern support), and the Barqa Army providing a nascent military, IHS assess that the PFG's orchestrated strike action is likely to be aimed, at least partly, at establishing the financial foundations of an autonomous state. This analysis is supported by simultaneous strike action at the eastern subsidiary of the NOC, the Arabian Gulf Oil Company (Agoco), by workers who successfully called for the replacement of the board of directors and increased autonomy from Tripoli. IHS has no information on the precise relationship between the CTC, the PFG, and Agoco, however, the simultaneous actions of these three groups are conspicuous. Should the political narrative that IHS assesses exists gain traction, and corresponding oil disruption be sustained or intensify, there is an increased likelihood that pro-Tripoli government forces will seek to take control of eastern oil facilities in order to restore the production and export that fuels 98% of the Libyan state budget. Nonetheless, there is little appetite for a sustained east-west conflict in Libya, and any fighting would be limited to facilities mainly along the Gulf of Sirte, with any damage likely to be collateral rather than targeted.

Outlook and implications

The trend in eastern Libya remains towards the creeping establishment of de facto autonomy for the Barqa region. The government in Tripoli has little ability to bring strikes at eastern oil facilities under control, and the groups operating under the federalist umbrella are unlikely to succeed in unilaterally selling oil given the current naval blockade of eastern oil terminals. As both groups benefit from the ability to sell oil, the mutual need for a resolution increases the likelihood that a deal will be struck between the two sides. While this will not resolve the issue of protests and sporadic uncoordinated strikes over local content issues, it does mitigate the risk of further cohesive sustained disruption such as the PFG strikes in August. Libya is currently preparing to hold elections for a constituent commission in early 2014, as part of its constitutional drafting process. The final constitution is likely to enshrine facts on the ground rather than attempt to impose a theoretical new state model. This is likely to fall short of imposing a federalist system, as the word 'federalist' is unpopular in Libya despite its tenets enjoying widespread support. Instead, the most likely scenario is that extensive autonomy will be enshrined under a devolved system of regional government, most likely to encompass the three traditional regions of Barqa (east), Tripolitania (west), Fezzan (south) and the new city states empowered by the 2011 civil conflict, most notably Misratah. In this way regional powerbrokers will have extensive control over taxation, allocation of revenues, and security priorities, while preserving the unity of the Libyan state.

Filter Sort