Libya's first oil company to be owned by a private firm is growing in the shadow of eastern commander

According to U.N. experts and shipping records, a Libyan company that is linked to a powerful faction in eastern Libya has exported at least $600,000,000 worth of oil since May. This marks the end of the National Oil Corporation’s monopoly over exports.

The little-known Arkenu Oil Company was established in 2023 and is the first private Libyan oil company to ship. This means that some of the oil revenue of Libya will likely be diverted away from the Central Bank of Libya.

Since the fall of Muammar Gaddafi, Libya has been divided by armed groups. It is now largely split between an internationally recognized government in Tripoli, located in the west, and a rival administration, controlled by Khalifa Hastar's forces, in the east.

The central bank of Tripoli has been at the center of many disputes, mainly over the distribution and use by that institution of the oil revenues. Haftar's troops, who control the majority of Libya's fields, have shut down production and exports periodically, most recently last August, to make sure money flows east.

Arkenu's ownership could not be determined. In a report submitted to the Security Council on Dec. 13, a U.N. expert panel said that Arkenu is indirectly controlled by Saddam Haftar. He is one of Khalifa Haftar’s sons.

Charles Cater is the director of investigations for The Sentry, a global investigative and policy organization.

For this article, we also interviewed Libyan experts, diplomats, traders, and reviewed over two dozen documents including letters from oil companies, government decisions, and bills of lading.

Arkenu's website and LinkedIn profile indicate that the company is headquartered in Benghazi. This city, located in eastern Libya, has a Mediterranean port with a terminal of oil under Haftar’s control.

Two sources claim that the company was founded in early 2023, by former employees of state-owned National Oil Corporation.

Arkenu website, but never received a response. A spokesman of the Libyan National Army (which Haftar commands) was also contacted without a response.

OPEC MEMBER

According to a U.N. Report, Saddam Haftar became chief of staff for the army's ground force in May of last year. This gave him control over the country's relations with its neighbouring countries, as well as its economic interests.

Arkenu's first connection to oil exports was when the Arabian Gulf Oil Company, a subsidiary of NOC awarded it ownership of a cargo in May. A letter dated 11 July seen by was the proof.

Arkenu exported seven more oil cargoes since then. Its total exports from May to December 2024 will be 7.6 million barrels based on shipping records and worth approximately $600 million if Brent crude average monthly prices are used.

Exxon Mobil, the U.S. oil giant, bought one of the cargoes destined to Italy on October 28, according documents and data reviewed by LSEG and Kpler.

According to a person with knowledge of the situation, Exxon purchased the cargo not directly from Arkenu but from another trader.

Unipec is the trading arm for China's Sinopec - the largest refiner in the world. At least two of these were destined for Britain or Italy.

Sinopec didn't respond to a comment request. It wasn't immediately clear whether Sinopec purchased the cargoes from Arkenu or another trader.

Requests for comments from the NOC, AGOCO, and central bank were not answered. The oil ministry refused to comment.

Libya, Africa's second largest oil producer, and a member of the Organization of the Petroleum Exporting Countries, has been in chaos since Gaddafi was overthrown, but oil exports remained under the control of the central government.

The NOC still accounts for a large part of Libyan exports. It has operated independently in this volatile country and maintained political neutrality.

Based on Kpler's data and calculations, it shipped 264 million barrels worth $21 billion in the same time period for Arkenu’s eight shipments.

SARIR AND MESSLA FIELD

Payments are made for NOC crude cargoes in dollars at the Libyan Foreign Bank, New York. Then they are transferred to the Tripoli Government's central bank account.

Shipping documents indicated that payments for Arkenu cargoes were to be made into accounts at the Dubai-linked state bank Emirates NBD, and Banque de Commerce et de Placements SA, both in Geneva. The documents did not indicate whether payments had been made to these accounts or where the money might have been deposited.

Emirates NBD stated that it could not confirm or deny client relationships because of internal policies and regulatory requirements. Banque de Placement confirmed or denied any client relationships in accordance with its policy.

U.N. experts say Haftar has the support of Egypt, Russia and United Arab Emirates.

He spent 20 years in the U.S. before returning to help rebels overthrow Gaddafi. He launched the Battle of Benghazi in 2014 and it has been his stronghold since then. His forces have a tight hold on the east of Libya where the majority of the main oilfields of the country are located.

Arkenu, in addition to being allowed to export crude oil, was also made a part-owner of the Sarir and Messla major oilfields. This is according to a letter from the NOC dated 10 July, during the tenure then NOC chairman Farhat Bengdara who resigned last week.

The letter didn't give any details about the partnership. AGOCO, a subsidiary of NOC, runs the two fields. They account for around 300,000. barrels of high-quality crude per day - same grade that Arkenu exports.

Cater, of The Sentry, said that there was no evidence to suggest that Arkenu had performed any development or services at the Mesla oil fields. Arkenu’s claims of hundreds of millions in NOC payments, made as oil export cargoes to Arkenu, raise serious suspicions of corruption.

Arkenu became a partner in the development of three smaller oilfields, Sultan and Latif (in Libya's east) and Tahara (in the west), according to an November 2023 cabinet resolution.

According to the U.N. Report, members of armed groups were appointed to different posts at the NOC as part of a reshuffle. This included setting up a separate office responsible for service contracts with private companies.

The U.N. report stated that "among them was an arrangement with the first privately owned oil company in Libya, Arkenu Oil Company."

(source: Reuters)