The new chief appointed by Tripoli-based Prime Minister Abdul Hamid Mohammed Dbeibah took office at Libya's National Oil Corporation (NOC) on Thursday despite opposition.
Oil is often at the heart of political rivalries in Libya, which has two governments, one in Tripoli led by Dbeibah, appointed last year as part of a United Nations-backed peace process aimed to end more than a decade of violence in the North African country.
Dbeibah appointed former central banker Farhat Bengdara to replace Mustafa Sanalla as NOC head, in a decree made public on Wednesday.
In a defiant video message, Sanalla told Dbeibah that "this institution belongs to the Libyan people, not to you or the Dbeibah family" adding that "the mandate of your government has expired."
On Thursday morning, Bengdara took up office.
"It's vitally important under the current conditions that Libya regains its oil and gas export capacity as quickly as possible," Bengdara told reporters in Tripoli.
"The oil sector has fallen prey to political struggles, but we will work to prevent political interference in the sector," he added.
Bengdara insisted that he had been picked for the job "because I'm a non-partisan man and not linked to any one side, and because I can travel anywhere in Libya."
But Sanalla, who has skillfully mediated disputes to keep Libya's crude flowing and positioned himself as an interlocutor with foreign powers and oil firms, accused the UAE of involvement in his sacking.
War-battered Libya suffers chronic power outages and rising poverty. This has fuelled public anger that has piled pressure on political elites in both the east and the west.
On Wednesday the NOC said it was lifting a force majeure at two eastern export terminals. They had been blockaded for three months by groups demanding Dbeibah's departure.
The dispute comes three months into a blockade of key eastern oil facilities that has slashed Libya's output, even as global oil markets are rattled by the war in Ukraine.
That has put pressure on consumer nations' governments, including the U.S. administration of President Joe Biden, to persuade other producers to ramp up output.
Libya is sitting on Africa's biggest proven crude reserves.
U.S. Embassy expresses concern
The U.S. Embassy in Libya expressed concern Thursday over the struggle for control of Libya's oil corporation.
The embassy tweeted that U.S. officials are following the developments with "deep concern." It added that the NOC has preserved its political independence and worked effectively during the country's turmoil under Chairperson Mustafa Sanalla. The statement indicated U.S. backing for the sacked oil chief.
"The reported replacement of the NOC board may be contested in court but must not become the subject of armed confrontation," said the U.S. Embassy.
In a video circulated on social media, employees of the oil company were seen rallying at the entrance of the corporation's building in Tripoli –apparently to prevent members of the Dbeibah-appointed commission from stepping in. However, later on, Dbeibah’s government announced that both the commission and the new oil chief had walked into the building and had taken their new posts.
The corporation issued a statement accusing a Dbeibah-allied armed group of breaking into the building and attacking workers before instating "by force" the new oil chief and his board.
Jalel Harchaoui, a Libya specialist and associate fellow at the Royal United Services Institute, warned that the NOC shake-up might provoke violence between militias backing opposing sides.
"Dbeibah has used armed forces to install Bengdara and Sanallah has the sympathy of several armed groups in the greater Tripoli area," he said.
The country’s prized light crude has long been a feature of Libya's conflict, with rival militias and foreign powers jostling for control of Africa's largest oil reserves. Last year, Libya was the seventh largest producer of oil in the Organization of the Petroleum Exporting Countries (OPEC), despite regular closures to its oil and gas infrastructure due to unrest. Washington says Libya is estimated to have a third of the African continent's oil reserves.
In recent months, Libya's tribal leaders have shut down crucial oil facilities, including the country’s largest oil field in the south. The blockage was likely meant to deprive Dbeibah’s government of funds and empower his rival, Bashagha.
The shutdown has exacerbated the country's electricity shortages and sparked protests, including one that resulted in the storming of the east-based parliament in Tobruk.
In recent months, the United Nations has sponsored several rounds of talks between the country’s two rival legislative bodies to agree on a constitutional mechanism to hold elections – without results.