Mustafa Sanalla, the chairman of Libya’s National Oil Corporation (NOC) called on the UN on Tuesday 18 September to take additional measures to counter illegal oil sales and terminal blockades, as he attempts to rebuild the country’s oil sector.

Sanalla welcomed a new report by a panel of experts from the UN Security Council on Libya issued earlier this month, which sets out repeated attempts to sell oil illegally by a rival national oil company, established in the eastern city of Benghazi since late 2017. The report also set out recommendations to counter fuel smuggling.

“NOC has repeatedly called for additional measures to combat the illicit export and sale of petroleum products, reform of fuel subsidies, and the sanctioning of all individuals attempting to blockade and illegally profit from the sale of Libyan natural resources,” said Sanalla.

Sanalla said he strongly supported the UN’s recommendation to extend measures authorising states to inspect vessels to or from Libya if there “are reasonable grounds to believe are illicitly exporting crude oil or refined petroleum products”.

The UN report highlights six attempts since August 2017 alone by the parallel institution, known as NOC East, to illicitly export crude oil. It offered discounts of up to $5-a-barrel compared to NOC’s reference prices for its crude, and revenues from the illicit sales were deposited directly into bank accounts in Jordan, according to the UN report.

So far, NOC East has failed to gain any traction with buyers, by NOC continues to push for the addition of 48 individuals and entities involved in the sales on the UN’s sanctions list.

According to the report, the biggest challenge to the integrity of NOC - one of Libya’s last remaining state-wide institutions - comes from the so-called Libyan National Army (LNA). Despite the name, in reality the LNA is one of Libya’s many armed groups. While it has come to dominate the east and south of the country, it has not been able to push west towards the capital, Tripoli.

In June, the LNA took control of Libya’s four main eastern oil export terminals, handing them over to NOC East. The terminals serve Libya's Sirte basin, a collection of oil and gas fields in central and eastern Libya that account for around 650,000 barrels a day (b/d), roughly two thirds of the country's total production. Tankers were also prevented from loading for NOC at the ports, costing Libya around $33m each day, NOC said, and causing production to fall to around 300,000 b/d.

The LNA, led by Khalifa Haftar who has been at odds with Sanalla over the oil ports, has also threatened to make a military push on Tripoli, raising the prospect of further disruptions to oil production.

All of Libya’s oil terminals are currently open, allowing the country's crude output to stabilise at two-month highs of over 1 million b/d. However, uncertainty over its political future, with national elections planned for December amid ongoing clashes in Tripoli, continues to cast a long shadow over the prospect of stable exports and revenues.