By Reuters
A Libyan company linked to the powerful faction that controls eastern Libya has exported oil worth at least $600 million since May, marking an end to the National Oil Corporation’s monopoly on exports, according to shipping records and U.N. experts.
The shipments by the little-known Arkenu Oil Company, which was set up in 2023, are the first by a private Libyan company and mean some of the country’s oil revenue is likely being channelled away from the Central Bank of Libya.
Ever since the fall of Muammar Gaddafi in 2011, Libya has been riven by disputes between armed factions and it is largely split, with an internationally recognised government based in Tripoli in the west and a rival administration in the east, which is controlled by the forces of military commander Khalifa Haftar.
The disputes have often centred on the distribution of oil revenue by the central bank in Tripoli. Haftar’s forces, which control most of Libya’s oilfields, have periodically shut down production or exports, most recently in August last year, to ensure money continues to flow east.
Reuters was unable to determine who owns Arkenu. However, a U.N. panel of experts said in a Dec. 13 report to the Security Council that Arkenu was indirectly controlled by Saddam Haftar, one of Khalifa Haftar’s sons.
“This is a striking precedent that reflects the growing influence of armed actors over the oil sector,” said Charles Cater, director of investigations at The Sentry, an international investigative and policy group.
Reuters also reviewed more than two dozen documents, including bills of lading, government decisions and oil company letters for this article, as well as interviewing diplomatic and trading sources and Libya experts.
According to its website and LinkedIn profile, Arkenu is headquartered in Benghazi, a Mediterranean port city in eastern Libya with an oil terminal under the control of Haftar’s forces.
The company was set up in early 2023 by former employees of the state-owned National Oil Corporation (NOC), according to two of the sources.
Reuters sent emails with detailed requests for comment to two addresses on Arkenu’s website but did not receive a reply. Reuters also contacted a spokesman for the Libyan National Army, which Haftar commands, without receiving a reply.
OPEC MEMBER
Saddam Haftar was appointed chief of staff of the army’s ground forces in May last year, allowing him to affirm control over its relations with neighbouring countries and its economic interests, according to the U.N. report.
Arkenu was first connected to oil exports when it was awarded ownership of a May cargo by the Arabian Gulf Oil Company (AGOCO), a subsidiary of the NOC, according to a letter dated July 11 seen by Reuters.
Since then, Arkenu has exported another seven oil cargoes, taking its total exports between May and December 2024 to 7.6 million barrels, according to shipping records, worth about $600 million, according to average monthly Brent crude prices.
U.S. oil major Exxon Mobil XOM.N bought one of the cargoes destined for Italy on Oct. 28, according to data from LSEG and Kpler and documents reviewed by Reuters.
A person familiar with the matter said Exxon bought the cargo from another trader, not directly from Arkenu.
Unipec, the trading arm of the world’s largest refiner, China’s state-owned Sinopec, bought at least two more, destined for Britain and Italy.
Sinopec did not reply to a request for comment. It was not immediately clear if Sinopec bought the cargoes directly from Arkenu, or from another trader.
The NOC, AGOCO and the central bank did not reply to requests for comment. The oil ministry declined to comment.
Libya, currently Africa’s second-largest oil producer and a member of the Organization of the Petroleum Exporting Countries (OPEC), has been in a state of chaos since Gaddafi’s overthrow, but oil exports had remained under central government control.
The NOC, which has long operated independently and maintained political neutrality in the volatile country, still accounts for the bulk of Libyan exports.
It shipped some 264 million barrels of oil worth nearly $21 billion during the same period covering Arkenu’s eight shipments, based on Kpler data and Reuters calucations.
SARIR AND MESSLA FIELDS
Payments for NOC’s crude cargoes are typically made in dollars to the central bank’s account at the Libyan Foreign Bank in New York, before being moved to the Tripoli government’s account with the central bank.
Payments for the Arkenu cargoes, however, were requested to be made to accounts at Dubai state-linked bank Emirates NBD and Banque de Commerce et de Placements SA in Geneva, the shipping documents showed. Reuters was unable to determine whether the payments were made to those accounts, nor where the money may have ended up subsequently.
Emirates NBD said it was unable to confirm or deny any client relationships due to internal policies and regulatory obligations. Banque de Placement also said it did confirm or deny any client relationships as a matter of policy.
U.N. experts have said Haftar is backed by Egypt, Russia, and the United Arab Emirates.
He lived in the U.S. for 20 years until he returned to join rebels in ousting Gaddafi. In 2014, he launched the Battle of Benghazi, which has been his stronghold ever since and his forces hold a tight grip over the east of Libya, where most of the country’s main oilfields are located.
Besides being allowed to export crude, Arkenu was also made a partner in the major Sarir and Messla oilfields, according to an NOC letter seen by Reuters dated July 10, during the tenure of then NOC Chairman Farhat Bengdara, who resigned last month.
The letter did not give details on how the partnership will work. The two fields are run by NOC’s subsidiary AGOCO and account for most of its output of roughly 300,000 barrels per day of high quality crude – the same grade Arkenu has been exporting.
“There seems to be no evidence that Arkenu has actually performed any services or development work at the Mesla and Sarir oil fields,” said Cater at The Sentry. “As a result, Arkenu’s claims to hundreds of millions of dollars from the NOC, paid in the form of oil export cargoes, raise serious red flags for potential corruption.”
Arkenu also became a partner with the NOC in developing three smaller oilfields – Sultan and Latif in Libya’s east and Tahara in the west – according to a 2023 cabinet decision seen by Reuters dated November 2023.
The U.N. report said members of armed factions had been appointed to different positions at the NOC itself as part of a reshuffle that included setting up an office at a different site responsible for service agreements with private companies.
“Among them was an agreement with the first private oil company in Libya, Arkenu Oil Company,” the U.N. report said.
