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Controversial Libyan deal on land and sea: Erdogan wants to make Turkey's national oil company the "protagonist"


The UN-led process for a political solution to the Libyan unrest, called the 2020 Roadmap for the Preparatory Phase of a Comprehensive Solution, states in Article 10 that the transitional unity government will not review any new or previous agreements or decisions, with way that harms the stability of the Libyan state's foreign relations or imposes long-term obligations.

Critics of the Turkey-Libya memorandum of understanding say the Libyan government violated that article with the hydrocarbons deal, which they say imposes long-term obligations on Libya.

The hydrocarbons deal is reportedly being challenged in Libyan courts on several grounds, including Turkish companies' lack of experience in the oil and gas industry and a confidentiality clause that allegedly violates the transparency required under Libyan control laws.

According to a reputable media outlet, the agreement, drawn up in the form of a memorandum of understanding (MoU) and signed on October 3, 2022, was sent to the parliament for approval by Turkish President Erdogan on January 10, 2023. Three days later, the speaker of the parliament sent it to the Foreign Affairs Committee for review and possible approval and will soon be signed into law by Erdogan.


It specifically aims to promote joint work by state-owned oil and gas companies to exploit Libya's hydrocarbon resources. Turkish Petroleum Corporation (Türkiye Petrolleri Anonim Ortaklığı, TPAO), Turkey's national oil company, will be the protagonist in the implementation of the agreement, while the Libyan National Oil Company (NOC) is committed to facilitating cooperation not only at sea but also on land.

The scope of the agreement is quite broad and includes some provisions that remain unclear. It covers not only existing hydrocarbon fields to be exploited, but also future onshore or offshore fields, according to Article 2, which covers forms of cooperation.

Turkish Petroleum International Company (TPIC), a subsidiary of TPAO which is active in all sectors of the oil industry, was also named in the agreement. The paragraph that mentioned TPIC makes reference to unspecified entities that both sides may later decide to include in the cooperation program.

“This means that President Erdogan, known for his blatant abuse of such agreements to enrich himself and his cronies in shady business deals, will have a free hand in appointing companies, contractors and subcontractors to execute the Memorandum of Understanding with the state-owned oil company of Libya," the authoritative source reports.

TPAO has had some project work in Libya in the past and even established a subsidiary, TP Libya Ltd., in May 2013, which ceased operations in August 2014 due to the unrest in the country. It was liquidated in November 2016 and the TPAO branch in Libya was closed in April 2017. With the new Memorandum, TPAO is set to return to Libya, perhaps with more political support from both Turkish and Libyan officials.

Turkey also included the state-owned Turkish Pipeline Corporation (BOTAŞ) in the agreement, which guaranteed that both countries would support BOTAŞ projects including the joint ventures in which it participates. The same trick is played in this provision, by adding a reference to unnamed "entities designated by the parties through diplomatic channels". The ambiguity paves the way for the Erdogan government to extend the deal without bringing any amendments to parliament for approval.

The memorandum of understanding is valid for five years and will be automatically extended for another five years, unless one of the parties wishes to withdraw and notifies the other party three months before expiry. According to Article 4, any work done in connection with the Memorandum of Understanding is kept confidential, even if the agreement is terminated at a later date.

Let us recall that the agreement caused criticism in Libya as well as from regional countries such as Egypt and Greece. The main challenge is based on the claim that the outgoing unity government in Tripoli does not have the authority to sign international agreements or memorandums of understanding. The rival eastern government and the Libyan parliament rejected the Memorandum.

The speaker of Libya's House of Representatives, Aguila Saleh, who has long argued that the Tripoli-based government's term is over, called the deal "illegal and unacceptable."

In Greece's view, the new Memorandum is an escalation by Turkey to undermine stability in the eastern Mediterranean and represents the next stage in the implementation of the 2019 agreement, which it violates international law. For Athens, this is also a violation of the sovereign rights of Greece and Egypt, which marked the borders of their exclusive economic zones in an August 2020 agreement that included overlapping areas claimed by Turkey and Libya in the 2019 agreement.

We point out that, Mohamed Aoun, Minister of Oil and Natural Gas in the Government of National Unity of Libya, said that there is a real possibility of finding friendly solutions between his country and some other countries such as Greece, Egypt and Cyprus regarding the delimitation of the maritime borders.

The Libyan official revealed that there is an expected return of international oil companies to resume operations in the country after they left in 2011 due to force majeure.


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