“Italy – Libya agreement doesn’t take care of Libyan interests.” Conversation with Mohamed Aoun, Minister of Oil and Gas

By Ines Miled.

“If the law is not respected and the interests of Libya are not taken care of, I will disagree with anyone in the Libyan state.” Words of Mr. Mohamed Aoun, Minister of Oil and Gas in the Libyan Government of National Unity. Minister Aoun, in this interview, opens up to Speciale Libia and clarifies many circulating news by sharing his extensive knowledge and expertise in the oil sector, from which Libyan people’s wealth depends on the most.

Minister Aoun, thank you for accepting this interview. Initially you strongly criticized the agreement between the Italian ENI and NOC.  Do you still think is it illegal? What does this agreement provide?

“Firstly, I welcome the Italian Speciale Libia. The position of the Ministry of Oil was very clear, which is that the procedures that took place are still illegal, as this agreement signed in 2008 and the approval of the Ministry and the government was not obtained before starting these negotiations. In addition to what was presented to the Council for Energy and the Council of Ministers, from our point of view, the memorandum still does not take care of the interests of the Libyan state. These discoveries were made 45 years ago, and the A and Y discoveries were announced since 2013, and these discoveries are located in the sea, far from areas that are considered unsafe. The National Oil Corporation (NOC) and ENI could have worked on developing these discoveries for a while, because it is obvious that we will need the gas to feed the power plants and fulfill the contract to sell gas to Italy via the Green Stream. The other additional point, and this is mentioned in the agreements, is that the development of crude oil and gas condensate will be postponed, and this is unscientific and illogical and is not in the interest of the Libyan state. It is assumed that these discoveries will be developed, so how can they be postponed? The whole world is turning to alternative energies and reducing fossil fuels and their use, so how do you postpone it and for how long?  How will it originally be converted into crude oil?  If this is an illegal procedure, from an economic point of view, we still see that the share of the Italian side, which is 30%, economically, has fulfilled the cost of procedures, and it has not happened in the history of Libyan oil that the shares of foreign parties were linked to the amount of expenses spent for investment. This did not happen in the whole history of Libyan oil.”

You have extensive experience in contractual matters since the time of the previous regime. Were you consulted before signing the agreement and what were your recommendations?

“We were not consulted on this matter, even given that it is imposed according to the laws regulating the oil sector, law 25 and law 24 of the year 1970 and Resolution 10 of the year of 1970, all of which establish that the Oil Corporation is affiliated and under the supervision and control of the Minister of Oil. Supervision and monitoring, in the sense that the minister should be informed of all the procedures and Articles 17 and 2 of the Oil Law, that after the Ministry of Oil imposes its conditions for the general interest of the Libyan state, the minister refers these conditions to the Council of Ministers or to the High Council for Energy Affairs, and it is not the Corporation that does so. Our recommendations are to reconsider this agreement and keep it as it is or refer it to the Ministry of Oil and Gas to decide upon it.”

You also expressed your opposition to the agreement with Turkey, do we remember correctly?

“Actually, I did not express my opposition. In fact, it is not an agreement. This point must be clarified. It is a memorandum of understanding. I personally signed several memorandums of understanding. They were presented to us by the Ministry of Foreign Affairs. Three or four days before they were signed, we were contacted by Mr. Minister of State for Prime Minister and Cabinet Affairs that it would be signed while I was on an official mission to South Africa at an international conference there, so I did not attend this agreement. The Minister of Economy was assigned to sign this agreement and we submitted an official memorandum to the Minister of State for Cabinet Affairs on the basis that the recommendations of the Ministry of Oil and Gas are taken into account in many of the terms of the agreement. Therefore, we have no objection to signing it.”

You did not participate in the signing of these agreements. Have you refused to participate or been excluded from Dabaiba?

“There was no exclusion. Regarding the Turkish memorandum of understanding, I was in South Africa, and regarding the ENI agreement, I was outside Tripoli.”

You had a bad relationship with Mustafa Sanallah, how is your relationship today with Bengdara?

“Whether with Mr. Bin Qadara or Mr. Sanallah, I have no personal disputes with them, nor do I have a personal dispute with anyone in the Libyan State. The main problem with the former illegitimate president, Mr. Sanallah, is that he did not abide by the laws and decisions that regulated the oil sector, and this is the main reason for disagreement with him. I do not have a personal relationship with him or a personal dispute, nor with Mr. Farhat bin Qadara, with whom my relationship falls under the respect of the law and the care of the interests of the Libyan state. If the law is not respected and the interests of the state are not taken care of, I will disagree with anyone in the Libyan state.  As long as there is respect for the law and its application, there is no problem.”

There is news on social media that Bengdara will soon change the Board of Directors of the Arabian Gulf Company (AGOCO) to other NOC controlled companies. Why these changes?

“Mr. Farhat bin Qadara can be the one asked about this. For me, as the Minister of Oil and Gas, according to the law, who is authorized to approve these changes, and if I receive a recommendation from the NOC to take legal measures, I have the decision to approve the changes according to the legal provisions, if the minister is convinced of these changes.  And if the proposals are qualified and experienced and within 14 days, these decisions are considered effective, and if the minister does not approve them and the head of the corporation insists on his decisions, the matter is referred to the Council of Ministers, and its decision is the final one on this matter, and this is the correct legal procedure.”

We also heard of controversial agreements with the UAE. What is your perception of other countries’ capacity to reach agreements with NOC like UAE, France, Russia, US and UK?

“Historically, the first companies to operate in the oil sector in the Libyan state since the late fifties and after the Oil Law No. 25 of 1955 was promulgated were mostly American, Italian, Wintershall of Germany, and British Petroleum of the UK.  All these countries have wide activities in Libya, but the recommendations of the Ministry of Oil are clear, which is transparency and efficiency in managing the most important resource of the Libyan state.”

How is your relationship with the Prime Minister Abdel Hamid Dabaiba?

“My relationship with Abd al-Hamid Dabaiba is that of a minister with a prime minister, and I have no personal relationship with him, and there is no disagreement.  A relationship of mutual respect, and he appreciates my patriotism in this position, but there may be some situations in which we differ, and this is logical, and I accept criticism, and the decisions taken in the Council of Ministers are the decisions of the majority.  He was not against my many oppositions, given the experience I gained.”

Have you ever thought about resigning in the past months?

“Why think of resigning?  I am a minister doing my job and my responsibility stems from the oil laws. What I see as correct, I agree to, and what I see as unlawful, I object to”.

Clear. According to Libyan law, can the NOC chairman make deals without the consent of the Ministry of Oil and Gas? Which bodies are designated to control NOC ^Is activities?

“The authority of the head of the National Oil Corporation is specified in Article 10 in 11 points in detail. The responsibility of each party is clear and codified and should not be exceeded.  The National Oil Corporation belongs by law to the Minister of Oil and Gas, and he has the authority to supervise and control its work. In the Council of Ministers, before we start our work, we swore in front of the Libyan Parliament, which gave us confidence on March 10, 2021, to respect the law and take care of the interests of the Libyan state.  Legal and ethical compliance is the most important. And that is how I work. In the Libyan state, we have the Administrative Oversight Authority, which is responsible for administrative decisions, the Audit Bureau, the Anti-Corruption Commission, and the Energy Committee in the Libyan Parliament. Finally, the High Council for Energy Affairs was created, whose formation we objected to and have been supported by the Audit Bureau. We are not against the establishment of such councils, these councils should be advisory and sponsor all energy activities in the Libyan state, including oil, gas, atomic, solar and electric energy.  All of them need a high advisory body headed by the prime minister, but its work should be advisory only, not executive”.

The Libyan Navy said to have stopped a vessel which was smuggling diesel from Zawiya refinery. Who is responsible for this smuggling and which are their links with the East of Libya?

“I have no knowledge of this matter”.

Do you want to add something to our questions?

“I repeat that the Ministry of Oil and Gas has a legally codified responsibility and has no dispute with any party in the Libyan institutions or ministries of the Libyan government”.