[Salon] A curious game of Libyan oil poker - Guest Post ArabDigest.org.

[Salon] A curious game of Libyan oil poker - micheletkearney@gmail.com - Gmail A curious game of Libyan oil poker Summary: a Libyan oil company that appeared, seemingly out of nowhere, has just done a big deal with China. The Libya expert Jalel Harchaoui had an intriguing post on his X (formerly Twitter) account on Tuesday about a Libyan oil company called Arkenu based in Benghazi. As Harchaoui noted, commenting on an article published the same day by the energy consultants Argus: Useful article on that (1mn bl) crude sale to China carried out by #Arkenu, which seems to have accomplished a tremendous lot of value added within July 2024 already! The article describes Arkenu as “a little known upstream company” which on 10 July exported 1 million barrels of crude from Libya’s eastern Mediterranean terminal Marsa al-Hariga. The crude was loaded onto a vessel chartered by the Chinese trading conglomerate Unipec, a wholly owned subsidiary of China International United Petroleum and Chemicals Corporation (Sinopec.) Unipec is headquartered in Hong Kong and has an extensive network of offices elsewhere in the world including London. Sinopec has for years pursued aggressive development strategies in Africa, Asia and the Middle East so it is no surprise to see its subsidiary jump into the Libyan theatre with a deal that Argus has valued at US$84 million. The consultancy notes that the tanker’s bill of lading lists Libya’s National Oil Company (NOC) as the sender “on behalf of Arkenu.” It points out that: Libyan crude sales have historically been the reserve of NOC and a handful of international oil companies that hold equity stakes in production assets in the country, including Italy's Eni, TotalEnergies and Austria's OMV. Turkey-based commodities trader BGN, which does not have any upstream production in Libya, also regularly appears on loading programmes as a seller of the country's crude. A document dated 10 July showed NOC had allocated to Arkenu an unspecified share of production from its subsidiary Agoco's Sarir and Mesla fields, in return for carrying out upstream development work on the fields. The arrangement implies Agoco is paying for Arkenu's services in the form of crude. On July 3 Italian authorities intercepted components of two Chinese Wing Loong II UAVs heading to Libya disguised as wind turbines As our North Africa energy expert Francis Ghilès explained in his most recent podcast on 10 July opacity is the best word to describe Sinopec and other Chinese companies’ deals in North Africa and elsewhere in the Middle East. As he put it, speaking of Algeria Algeria is signing more and more agreements with China but they're back to back agreements. Nobody knows what's in them. The Algerian government will never favour an Algerian company, other than the few big ones linked to the military. So it signs agreements with Chinese companies. And the Algerian industrialists or entrepreneurs, people on the ground, have no idea what's in them. What is true of Algeria is even more true of a fractured Libya which Francis Ghilès describes as resembling a “Mafia gangland.” Chief among its leaders is the Benghazi warlord Khalifa Haftar and his family clan. Haftar long at odds with the NOC has threatened and used oil blockades to secure what he has called a fair share of oil revenues. (Nothing has emerged to suggest that the Haftars have links to Arkenu.) The company’s website takes the opacity level to new and rather bizarre heights. Arkenu, the website says, was established in early 2023 and has “a team of experts who have more than 35 years of experience, as this team includes a group of experts who have held high positions in major oil production and development companies.” It does not name any of them. Nor does it list a board of directors or an executive committee. Under the heading of “Tenders” up pops a strange dissertation on the advantage of mirrored glasses when playing poker: “While mirrored glasses poker does not involve outright poker cheat, their use is sometimes debated within the poker community.” A search for current work under the categories of output, development, drilling and maintenance of wells produces only the response “no posts found.” Opacity and the curious nature of its website aside there is nothing to suggest that Arkenu is engaged in any illegal activities. What is clear is China’s presence in the North Africa energy sector is continuing its rapid expansion on several fronts. No need for mirrored glasses to confirm that trend. Members can leave comments about this newsletter on the Arab Digest website