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Libya has lost more than $1bn of revenue in less than a month as a result of the oil blockade imposed by the warlord Khalifa Haftar in his attempt to force the Tripoli-based Government of National Accord from power. There is, as yet, no sign of the blockade being lifted or of it achieving its desired result. With every week that it continues, the pressure will increase as the economic and social effects become more pronounced. Fuel and electricity supplies have already been affected and the situation is likely to worsen.

On 17 January, senior officers from the Libyan National Army General Command and the Petroleum Facilities Guard (PFG) of the Central and Eastern Regions instructed the managements of Sirte Oil Company (SOC), Harouge Oil Operations, Waha Oil Company, Zueitina Oil Company and Arab Gulf Oil Company to stop oil exports from the terminals at Marsa Al-Hariga, Zueitina, Marsa Al-Brega, Ras Lanuf and Sidra. National Oil Corporation (NOC) closed the ports, placing them under force majeure the next day.

The warlord Khalifa Haftar’s comprehensive blockade of oil export terminals in eastern and western Libya is an attempt to force his drawn-out siege of Tripoli into an endgame. His price for lifting the blockade is the replacement of both National Oil Corporation (NOC) chairman Mustafa Sanalla and Central Bank of Libya (CBL) governor Sadiq Al-Kabir. He also wants a greater share of oil revenues. Acceding to these demands would hand Haftar control of the two institutions that control the country’s resources and its money.

National Oil Corporation (NOC) chairman Mustafa Sanalla has unveiled a $60bn five-year investment plan to increase crude oil production from 1.25m b/d now to 2.1m b/d by 2024 and gas output to 3.5 bcf/d. Speaking at the Libyan British Business Council in Tunis on 26 November, he said that LYD15bn ($10.5bn) would come from state budgets and the remaining 80% from strategic investors.The first step is to spend a relatively modest $1.2bn to raise production to 1.5m b/d in 2020.

An agreement on maritime jurisdiction areas signed by the head of the Libyan Government of National Accord’s Presidency Council Fayez Al-Sarraj and Turkey’s President Recep Tayyip Erdogan in late November has provoked furious responses from the governments of Egypt, Greece and Cyprus and has dragged Libya into the intractable geopolitical morass of the eastern Mediterranean.Important elements of the accord are not yet clear. For instance, it is not yet obvious whether it is a memorandum of understanding or an actual treaty.

Angered by lengthy and unpredictable power cuts, armed groups in Tripoli are using force to divert electricity to their own neighbourhoods, breaching one of the final taboos of national belonging as they do so. On two occasions these attacks have obliged the Man-Made River (MMR) to stop pumping, depriving the capital city of water for several days each time.Throughout the summer, outages caused either by armed intervention or the failure of poorly maintained equipment have become an almost daily occurrence.

Despite the negative outlook for Libya’s oil and gas sector in general, some business is still possible. On 13 June, National Oil Corporation (NOC) agreed to restore gas supply to two urea plants operated by Libya Norwegian Fertiliser Company (LifeCo) at Marsa Al-Brega. It said in a statement that factory operations were expected to restart shortly.

Libya’s armed conflict has been focused since April on the southern regions of Tripoli, an area quite far from oil fields and facilities, and this has allowed operations to carry on without interruption. In recent weeks, the only two major oil sites to have been damaged were a warehouse owned by Mellitah Oil & Gas, which was destroyed in an aerial bombardment, and some fuel storage tanks owned by Brega Oil Marketing Company, which were destroyed by shelling during fighting for control of Tripoli International Airport.

Almost a year after the last attempt to establish autonomous crude oil sales, Field Marshal Khalifa Haftar, via the Cyrenaica-based rival management of National Oil Corporation (NOC-East), is again trying to negotiate deals with buyers from the United Arab Emirates. The United Nations and its international backers are mobilising against the threat, which if realised could result in both the total shutdown of oil production and a catastrophic partition of the country.

The Libyan National Army (LNA) assault on Tripoli is developing into a protracted siege with casualties rising as air strikes and missile attacks become more common. According to the World Health Organisation, by 28 April 345 people had been killed and 1,652 wounded in this new phase of fighting. Other reports said about 30,000 people have been displaced since combat activities resumed. The conflict is still concentrated on the capital and oil production has not yet been affected, but threats to the sector are increasing all the time.

Has Field Marshal Khalifa Haftar overreached in his high-risk military advance on Tripoli? The dominant view is that he has erred politically by throwing everything into an all-or-nothing play for domination, and militarily by underestimating the difficulty of conquering the capital and the cohesiveness of local militias. The alternative view is that while military options remain open to him, there is no reason to compromise, especially with the militias who increasingly dominate and control the UN-backed Government of National Accord (GNA). He may still have some advantage to gain.

National Oil Corporation (NOC) has taken a hard line on blockades, refusing to give in to threats of extortion and insisting that perpetrators should face judicial sanctions. In an official statement on 4 March, NOC said that Brigadier-General Al-Rifi Kenah Ahmed Ali, who was appointed commander of the Libyan National Army’s Oil Assets Protection Unit in late February, had written to Akakus Oil Operations – its joint venture with Repsol, Total, Equinor and OMV, which runs the field – confirming that all individuals subject to arrest warrants from the public prosecutor had been removed from the site and would not be readmitted.

An early March decision by National Oil Corporation (NOC) to lift force majeure at the Es-Sharara oil field in south-west Libya is just one consequence of recent decisive military developments in the southern province of Fezzan. An illegal three-month blockade was lifted when the field was taken over by forces under the command of Field Marshal Khalifa Haftar, commander of the Libyan National Army (LNA) and opponent of the internationally backed Government of National Accord (GNA) in Tripoli.

An Egyptian-Libyan developer of power projects is negotiating with the management of the Misratah Free Trade Zone and the authorities including General Electric Company of Libya (Gecol) to build a solar plant with an initial capacity of 50MW and a potential expansion to 300MW, but the project faces huge political, legislative and financial hurdles.IQ Power, the sponsor of the Misratah Free Zone (MFZ) solar photovoltaic project, is reworking the consortium that will ultimately deliver the project, according to its chief executive and business development director Sharif Al-Haj.

A decision by National Oil Corporation (NOC) not to renew the three-year-old deal giving Glencore the exclusive right to lift crude from the Marsa Al-Harigah terminal outside Tobruk demonstrates how much the conditions under which Libya exports crude have changed in the past year. The hoped-for resumption of operations at the Ras Lanuf oil refinery in April – if it can be achieved – will change the picture further.