US Proposes Managing Libya’s Oil Revenues to Ease Crisis


On Thursday, the US Ambassador to Libya, Richard Norland proposed a mechanism to manage the flow of Libyan oil revenues to help the current political crisis, as two rival prime ministers vie for power.

In an interview with Reuters, the US ambassador said that the rival factions in the country have argued over who gets to control oil production, sales, and revenues for years. This has fuelled the political chaos and violence, that has ravaged Libya since 2011 NATO-backed uprising.

The proposal aims to stop the crisis spilling over into economic warfare that would deprive citizens of salaries, subsidised goods, state investments, and hit global energy markets, the Ambassador added.

Any threat to Libya’s output, which has topped 1.3 million barrels per day in recent months, would hit markets already reeling from the Ukraine crisis.

“The issue is to reach an agreement on the best way to make sure that Libya’s oil wealth is employed where it’s needed to help people, and that it’s monitored so that people can be confident it’s not being diverted for political uses or for inappropriate uses,” the US ambassador said in an interview.

The current crisis erupted after Libya failed to hold its first Presidential elections on 24 December, under a UN-led reconciliation effort. The peace plan, which also involved installing an interim unity government last year. This was aimed at resolving the conflict between the country’s main factions that split Libya in 2014, between rival governments in east and west.

The Libyan Parliament named a new Prime Minister, former Interior Minister Fathi Bashagha, to lead a new interim government in February. MP’s argued that the incumbent PM, Abdel-Hamid Dbaiba’s mandate expired when the elections failed to take place. Dbaiba warned that the appointment of a new interim government could lead to war and chaos in the country. He renewed his pledge to only hand power over to an elected government.

The US ambassador said both men had made commitments to avoid violence or escalation, but the situation remained still dangerous. “If this situation drags on there is a risk of violence. And if that occurs then each side will bear some degree of responsibility and I think that’s not something either side wants,” he said.