Tag Archives: Libya oil

How to Profit from Chaos: the case for Libyan oil

The Scoglitti Restaurant blocked by the US Treasury.

On February 26, 2018, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) today sanctioned six individuals, 24 entities, and seven vessels pursuant to Executive Order (E.O.) 13726 for threatening the peace, security, or stability of Libya through the illicit production, refining, brokering, sale, purchase, or export of Libyan oil or for being owned or controlled by designated persons.  Oil smuggling undermines Libya’s sovereignty, fuels the black market and contributes to further instability in the region while robbing the population of resources that are rightly theirs.  Illicit exploitation of Libyan oil is condemned by United Nations Security Council Resolutions (UNSCRs) 2146 (2014) as modified by 2362 (2017).  As a result of today’s actions, any property or interest in property of those designated by OFAC within U.S. jurisdiction is blocked.  Additionally, U.S. persons are generally prohibited from engaging in transactions with blocked persons, including entities owned or controlled by designated persons.

OFAC designated Darren Debono, Gordon Debono, Rodrick Grech, Fahmi Ben Khalifa, Ahmed Ibrahim Hassan Ahmed Arafa, and Terence Micallef pursuant to E.O. 13726 for their involvement in the smuggling of petroleum products from Libya to Europe.  In 2016, Maltese nationals Darren and Gordon Debono formed an unofficial consortium for illicit fuel smuggling from Zuwarah, Libya, to Malta and Italy in an operation that reportedly earned the group over 30 million eurosLibyan national Fahmi Ben Khalifa managed the Libya side of the fuel smuggling operation, and Maltese national Rodrick Grech transported the Libya-originated fuel to European ports where it was sold using falsified fuel certificates, reportedly forged by Egyptian-Maltese citizen Ahmed Ibrahim Hassan Arafa, to obfuscate the fuel’s origin.  Additionally, Maltese national Terence Micallef operated a Malta-based shell company to sell the smuggled petroleum products in Europe.

The February 26, 2018 Treasury action also targeted 21 companies for being owned or controlled by Darren and Gordon Debono and three additional companies for being involved in the illicit exploitation of crude oil or any other natural resources in Libya, including the illicit production, refining, brokering, sale, purchase, or export of Libyan oil.  [These included]….the Malta-based Scoglitti Restaurant, Marie De Lourdes Company Limited, World Water Fisheries Limited, and Andrea Martina Limited for being owned or controlled by Darren Debono.

Excerpts from Press Release, Treasury Sanctions International Network Smuggling Oil from Libya to Europe, Feb. 26, 2018

How to Destroy a Country: attack the central bank

Libyan Dinar. image from wikipedia

The United Nations condemned a reported attack on an office of Libya’s central bank in the eastern city of Benghazi, calling for an inquiry into the incident that has complicated talks between the country’s warring parties.,,The incident at the bank, which has tried to stay out of the conflict, weakened the Libyan dinar against the dollar on the parallel market. The bank is controlling the country’s vital oil revenues and foreign currency reserves.“The United Nations Support Mission in Libya condemns the reported armed attack against the Central Bank branch in Benghazi, a sovereign symbol of the Libyan State,” it said in a statement…

A Reuters reporter could see damage to the bank building located in the city center, the scene of heavy battles for weeks between eastern government troops and Islamist fighters…Both conflict parties have been fighting for control of the oil producer and appointed separate heads for the central bank which held $109 billion in foreign reserves at the end of June, the last published figure. Experts believe the figure has fallen due to a slump in oil output.  Oil revenues are booked abroad on accounts of a state bank to which only the central bank has access. About half of the currency reserves are held in illiquid or rather exotic assets such as equity stakes from Italy to Bahrain or Chinese bonds.

Excerpt from U.N. condemns attack on Libyan central bank, demands inquiry, Reuters, Friday, 23 January 2015

The Division of Libya

Libya satellite image

Libya’s self-proclaimed prime minister [Omar al-Hassi] has warned that attempts by a rival government in the east to assert control over the oil industry could escalate the political conflict dividing the OPEC member state and force it to break in two.  Libya has had two governments competing for power since August 2014 when a group called Operation Libya Dawn, which opponents say is backed by Islamists, seized Tripoli and forced the elected Prime Minister Abdullah al-Thinni to flee 1,000 km to a small city near the border with Egypt.

The warning by Omar al-Hassi, prime minister of the rival government, came after Thinni’s government claimed air strikes on Tripoli’s Mitigate airport this week, escalating a confrontation that started with an attack by Libya Dawn on a rival force in Tripoli in July.  The new rulers in the capital are not recognised by the United Nations and world powers but have taken over ministries, oil facilities, airports and much of western and central Libya.

In a step to assert control over the oil industry, Thinni’s government said it had appointed a new chairman of the National Oil Corp. Thinni had initially retained the state oil firm’s previous head, Mustafa Sanallah, but he remains in Tripoli.  The conflict gripping Libya three years after the overthrow of Muammar Gaddafi poses a legal dilemma for oil traders, who are left wondering who owns Libya’s oil exports, worth more that $10 billion a year. The country sits on Africa’s largest oil reserves…

“There are attempts (by Thinni) to set up an eastern Supreme Court, there are attempts to launch a central bank in the east, there are attempts to establish a separate oil ministry in the east,” said Hassi, who said he was against partition.

Thinni’s government has sought to move heads of state-run institutions to the east as he is recognised by the international community, but he too denies any plans for secession.

But Hassi said Thinni’s government had shown it intended to control oil facilities in the eastern rump state by picking al-Mabrook Bou Seif as new NOC Chairman, since he was from the same tribe as Ibrahim Jathran, a former rebel leader who seized eastern ports for a year to press for regional autonomy.

Struggle over Libya’s oil risks breaking up country -rival PM, Reuters,  Nov. 28, 2014