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Monday, June 27, 2022

Libyan Audit Bureau Accuses NOC Chairman Mustafa Sanalla of Corruption

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Lack of transparency, legal irregularities, loss of investment opportunities, and a defect in the membership structure of the Board of Directors. This is how the Libyan Audit Bureau described the performance and work of Libya’s state oil firm – National Oil Corporation – (NOC) in its 2019 report.
A shocking report report that reflects the wide collapse of the Libyan state institutions and the control of financial corruption in public sector, thanks to the weak successive and militias- controlled governments.


The Bureau attributed the delay in publishing the 2019 annual report to the crises the country was facing, in reference to the war that broke out in April 2019, and the global COVID-19 pandemic of 2020.


The report stated that the NOC had squandered an investment opportunity that could have been achieved through the acquisition of the shares of the American company, Marathon Oil. The NOC ceded this opportunity to the French company, Total under the pretext of a lack of funding for such deals at the time.


In December 2019, NOC chairman Mustafa Sanalla announced in a statement his approval of the deal for Total to buy the Marathon Oil stake. The deal includes an investment of $650 million USD in developing the Al-Waha concessions, in order to increase production by 180,000 barrels per day.
Several Libyan parties called the public prosecutor to open an investigation into the incident. However, no new information was published if an investigation was opened into the matter or not.
Due to the security situation in the country, Libya has recorded inconsistent oil revenues in recent years, with 41.3 billion dinars earned in 2019, a 6% decline from 2018. In 2020, it recorded 9.2 billion Libyan dinars, a further decrease of 92% from the previous year.


The Bureau added in its report that NOC continues to refuse to disclose the finances, benefits, and allowances that Sanalla and its Board of Directors have received.


In related ,the Africa Intelligence newspaper published a report in January on a case before an American court between Sanalla and Alpine Armoring company. Sanallah complained about the delay in the delivery of an armored Chevrolet vehicle worth about $400,000, almost 2 million Libyan dinars from the US based company.


Among the alleged violations, the Bureau stated that Sanalla had opened a branch of the NOC in the state of Houston; USA, without consulting with the competent authorities. Sanalla refused to cooperate with the Bureau’s requests to hand over all required documents, and demanded they communicate with him directly ,the report explained.


This illustrates the unstable relationship that was linked to Sanalla and other Libyan officials, such as the Governor of the Central Bank of Libya (CBL) Al-Siddiq Al-Kabeer and the Prime Minister of the Government of National Accord Fayez Al-Sarraj. The three exchanged accusations of negligence and miscommunication in multiple statements and press releases on several occasions.


“Delays in preparing public budgets, a lack of transparency regarding corporate management meetings, failure to find a solution to the legal and administrative situation of the General Administration of Corporate Accountability, and the absence of an internal regulation and procedures guide that controls the internal work of the Corporation’s Marketing Department,” were attributed to the Chairman by the report.

It added that “large numbers” of Libyan employees have been assigned by NOC to its subsidiary companies, despite complaints issued by these companies that there are no vacancies to accommodate these employees.


In an illustrative table, the total number of employees for the corporation and its subsidiary companies stood at 68,885, of whom 67,451 were Libyan nationals, 246 Arab nationals, and 1,988 foreign nationals. This represents an increase of 1,665 employees in one year.


Describing the fuel crisis especially in the south and west of the country, the Bureau said that the cause of the crisis is due to “poor supervision and control policies and procedures for distribution companies and stations. This is a result of the distribution companies procrastinating in providing the Brega Distribution and Marketing Company with data and information.”


The report stated that there was a mismatch between the quantities withdrawn from the sales and monitoring systems of the distribution companies. As well as the failure these systems to be linked with the port of Tripoli.


In spite of all these accusations, the US Ambassador to Libya Richard Norland announced that Sanalla had won the “Anti-Corruption Champions” award from the US Department of State for the role he played “in protecting Libyan natural resources.”

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