Libya parliament passes deal to end central bank crisis

Libya's eastern-based parliament today approved an agreement to resolve a leadership crisis at the central bank, which is likely to lead to a lifting of the country's oil blockade.

The eastern-based House of Representatives and the western-based High Council of State agreed on 26 September a deal to appoint Naji Mohamed Issa Belgasim as governor of the central bank and Marei Muftah Rhayyel Al-Bar'assi as deputy governor.

The leadership of the central bank was thrown into disarray on 18 August when the western-based presidency council attempted to replace long-serving governor Sadiq al-Kabir — a move rejected by the country's eastern-based administration. The eastern-based Libyan National Army (LNA) imposed an oil blockade on 26 August in a bid to starve the western-based government of revenues. This has halved the country's crude output, which Argus estimates at about 500,000 b/d.

The deal to resolve the leadership central bank crisis is likely to see the LNA lift its blockade, although precise timing is unclear. An oil industry source told Argus that he expects it to be this week.

The El Sharara oil field is also likely to restart production when the blockade is lifted, a source told Argus. El Sharara was producing around 260,000-270,000 b/d when it was shut down in early August, in a dispute unrelated to the central bank crisis.

A total lifting of the blockade would restore Libya's crude output to more than 1.2mn b/d.

By Aydin Calik