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Exit of Libya’s oil chief is a sign change must come, say analysts

Farhat Bengdara speaks to reporters after his appointment in July 2022. Masoud Suleman, right, is now acting chairman of the LNOC Reuters/Hazem Ahmed
Farhat Bengdara speaks to reporters after his appointment in July 2022. Masoud Suleman, right, is now acting chairman of the LNOC
  • Farhat Bengdara resigns from LNOC
  • Rival governments tussle over oil cash
  • Libya targets 2 million bpd by 2030

The embattled chairman of the Libyan National Oil Corporation resigned last week after less than three years in post. Farhat Bengdara’s departure was for health reasons, LNOC said, but industry insiders believe it indicates the time has come for structural change and redistribution of oil revenues in Libya.

Bengdara had several disagreements with Abdul Hamid Dbeibah, prime minister of Libya’s internationally recognised government in Tripoli, over his management of the oil company’s funds. 

The award of a contract to develop the NC7 block in the Ghadames basin set Bengdara against Mohamed Aoun, a former oil minister in Dbeibah’s government. The contract is still under investigation by the Libyan attorney general, according to a document dated January 19 and seen by AGBI.

Bengdara’s appointment as LNOC chairman in July 2022 was considered a compromise between Dbeibah’s government and the rival administration in the east, led by Khalifa Haftar, that would keep the oil flowing. But the discord continued.

His resignation is likely to be “due to the internal frictions within the sector and between the sector and the government, but it could also be a part of a larger political change forthcoming in Libya”, says Salem Maiar, a Libya analyst and AGBI columnist.

Oil and gas accounts for around 95 percent of the Opec member’s revenues, while eastern Libya produces about two-thirds of its oil. The LNOC has oversight of Libya’s oil revenues – and Bengdara had been able to send funds to the east of the country.

Libya wants to raise its output from 1.4 million barrels per day to 2 million bpd by 2030. However, political disputes, lagging infrastructure investment and threats by foreign companies to quit the country are disrupting its efforts. 

“Bengdara’s real story is about shifting political alliances,” Anas El Gomati, a London-based Libya expert, tells AGBI.

“He became a part of a larger struggle: who controls the flows? It was a delicate balancing act: Haftar’s man managing physical flows while Dbeibah’s government controlled the money,” says Gomati. 

“But balance in Libya is always temporary.”

‏LNOC vice-president Masoud Suleman has been named acting chairman and is one of the leading candidates to get the job permanently. Another is Mohammed bin Shatwan, chairman of the Arabian Gulf Oil Company. 

The next chairman is likely to “continue the actual status quo”, says Maiar.