U.A.E. Backed Militia Leader's Bid to Take Control of Libyan Oil Exports

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Eastern Libya militia leader Khalifa Haftar, left, at a military parade in Benghazi in May.

Eastern Libya militia leader Khalifa Haftar, left, at a military parade in Benghazi in May.


Photo:

abdullah doma/Agence France-Presse/Getty Images

United Arab Emirates officials have engaged in secret talks with a Libyan military commander seeking the Gulf state’s help in exporting Libya’s oil outside of United Nations-approved channels, Libyan, Emirati and European officials said.

With the U.A.E.’s assent last month, Khalifa Haftar, the military commander of forces in eastern Libya, moved to cut off his political rivals in Tripoli in western Libya from 850,000 barrels a day of oil production and begin exporting the oil through a breakaway company based in his part of the country, the officials said. The decision threatened to undo years of international efforts to reunify Libya and contributed to a rise in international crude prices to close to $80 a barrel.

Under international pressure, Mr. Haftar on Wednesday backed away from his plan, which would have violated U.N. National Security Council resolutions that ban any export of Libyan oil except through the country’s National Oil Co. in Tripoli. The U.S., U.K., France, Germany and Spain had vowed action last month against any such effort.

The U.S. and Europe have supported the National Oil Co. as a core institution of the U.N.-recognized government in Tripoli, as opposed to the eastern government supported by Mr. Haftar’s forces.

While the U.A.E. publicly supports the U.N. resolutions, the wealthy Gulf monarchy has moved privately to strengthen Mr. Haftar as a bulwark against Islamist political groups that it sees as linked to regional rivals Turkey and Qatar and to the Tripoli government.

U.A.E. government officials have been in talks with Mr. Haftar to facilitate independent oil sales through Emirati companies, and their support late last month emboldened the military leader to attempt his unprecedented effort to cut out the National Oil Co., the Libyan, Emirati and European officials said.

Mr. Haftar and other eastern Libyan government officials have grumbled that Tripoli has shared too little of the nations’ oil revenue with them, even though much of the country’s oil facilities lie in the East.

The U.A.E. tempered its support for Mr. Haftar over the weekend under pressure from the U.S. and France, and worked to forge a compromise between Libya’s East and West, the officials said.

The U.A.E. government declined to comment, as did a spokesman for Mr. Haftar’s group of militias, which calls itself the Libyan National Army.

Khalifa Haftar, the military commander whose forces dominate eastern Libya, arriving in Paris for an international conference in May.

Khalifa Haftar, the military commander whose forces dominate eastern Libya, arriving in Paris for an international conference in May.


Photo:

PHILIPPE WOJAZER/REUTERS

The episode displayed how foreign powers are still using Libya as a proxy battleground seven years after the ouster and death of strongman Moammar Gadhafi fractured the country into warring factions. It also dented hopes that progress on reunification would gather speed ahead of a national election planned for December.

“This kind of activity threatens the destruction of Libya as a nation,” said

Jonathan M. Winer,

the former U.S. special envoy to Libya under President

Barack Obama.

The U.A.E.’s support for Mr. Haftar dates back to 2014, when he launched a campaign against what he called terrorists and eventually gained control of eastern Libya.

The U.N. last year accused the U.A.E. of violating an international arms embargo by sending military vehicles and other equipment to Mr. Haftar. The U.N. panel investigating suspected arms smuggling to Libya said last year it received no response from the U.A.E.

Mr. Haftar’s supporters say Islamist armed groups in Libya receive support of their own from Qatar, with which the U.A.E., Egypt, Saudi Arabia and Bahrain have severed diplomatic ties over its alleged support for terrorism. Qatar has denied it supports terrorist organizations.

An oil storage tank at the oil port al-Sidra in eastern Libya, the country’s production heartland.

An oil storage tank at the oil port al-Sidra in eastern Libya, the country’s production heartland.


Photo:

ABDULLAH DOMA/AGENCE FRANCE-PRESSE/GETTY IMAGES

Western and Libyan officials say Qatar has financed eastern Libya warlord

Ibrahim Jadhran,

who has battled Mr. Haftar in recent weeks for control of the country’s oil-export facilities. Mr. Haftar ultimately retained control of the export hubs, which handle more than 80% of Libya’s roughly 1 million barrels a day of oil production.

For two years, Libya’s eastern government has been trying without success to sell oil independently of the National Oil Co. through a company called NOC East.

According to documents reviewed by The Wall Street Journal, NOC East secured contracts with at least 18 companies since 2016 to sell millions of barrels of oil. Some of the companies signing those contracts were based in the U.A.E., the documents show. NOC East’s chairman, Faraj Said, said over the weekend he didn’t plan to sign new deals, including in the U.A.E.

Despite the contracts, those companies have always been thwarted in their efforts to ship Libyan oil. As recently as May 19, an Emirati tanker approached eastern Libya to load crude without the National Oil Co.’s consent. A European Union helicopter that normally patrols the Mediterranean for illegal immigrants spotted it, engaged it and forced it to retreat, according to Libyan and Western officials.

As early as mid-June, Mr. Haftar held talks with the U.A.E. about exporting oil through NOC East, bypassing the National Oil Co., according to Emirati, Libyan and European officials.

In late June, U.A.E. government officials gave Mr. Haftar assurances that they would help him break away from reliance on the National Oil Co., Libyan and Western officials said. On June 28, Mr. Haftar took the unprecedented step of handing over export rights to NOC East and bypassing the National Oil Co.

National Oil Co. Chairman

Mostafa Sanalla

met Monday with representatives of the eastern government and reiterated he wouldn’t surrender oil sales to unauthorized parties, according to people familiar with the meeting. But the Central Bank of Libya late Tuesday agreed to be subjected to an independent review, responding to Mr. Haftar’s contention that its accounts are too opaque.

By Wednesday morning, Mr. Haftar agreed to let the oil exports flow again.

Write to Benoit Faucon at benoit.faucon@wsj.com and Summer Said at summer.said@wsj.com

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