Libya’s United Nations-backed National Oil Corporation (NOC) has closed four oil ports held by the military chief Khalifa Haftar, collapsing the country’s hydrocarbons production.

The NOC has also written to the UN sanctions committee and foreign embassies with evidence that it says shows Haftar’s allies have for years been offering questionable contracts in breach of UN resolutions, that would lead to millions in dollars of oil revenues being siphoned out of the Libyan economy.

In the letter, the NOC chairman Mustafa Sanallah has called on the international community to back sanctions against 46 named individuals and entities, including the chairman of a rival oil corporation that is seeking to run the four ports.

Fighting last month resulted in the deaths of 300 people when the four ports were attacked by a local militia and then recaptured by Haftar’s Libyan National Army (LNA), which controls most of east Libya.

But the LNA provoked outrage when it announced that oil exports would no longer be under the control of the Tripoli-based NOC, and instead would be handed to a rival corporation based in Benghazi. The LNA, and its political allies in the east of Libya, accuse Tripoli’s Central Bank governors of failing to stop some oil revenues funding militias.

In response, Sanallah has described Haftar’s action as a “blockade” and has suspended the loading of contracts for the ports. He said in a statement “the storage tanks are full and production will now go offline”.

Production is now down by more than 800,000 barrels a day, cutting more than two thirds of Libyan production with losses of £54m a day.

Western states back Sanallah and the Tripoli-based Government of National Accord, and diplomats are worried that dividing the oil sector between rival governments risks creating further chaos in the country.

The NOC said it was releasing the documents to show the incompetence and unlawful activities of its rival: “Collectively, these contracts imply a loss to the Libyan state of over $800 million at the very least.”

A joint statement from Britain, France, Italy and the United States last week said the ports must be returned to Tripoli control: “These vital Libyan resources must remain under the exclusive control of the legitimate National Oil Corporation and the sole oversight of the Government of National Accord.”

In his letter, Sanallah called for sanctions against the 48 individuals and entities. He said: “Inaction by the international community against these efforts would by itself constitute a victory for ‘NOC Benghazi’, with grave consequences for peace and security in Libya. In particular, I am concerned that these efforts may accelerate ahead of the elections planned for December, and that they may create conditions that interfere with the acceptance by certain segments of the Libyan population of elections results.”

Some of Haftar’s allies believe he is determined to use his leverage to win control of the Central Bank.

France, which has previously been seen as sympathetic to Haftar, is said to be furious with him, warning him he faces a political backlash if he continues on the current course. But Haftar’s two biggest external allies – Egypt and the United Arab Emirates – have not turned against him, and a key test is whether the UAE buys Libyan oil outside of the NOC structures.

Source: The Guardian