By Sami Zaptia.
London, 5 June 2017:
The National Oil Corporation’s (NOC) Brega Marketing Company has announced its intention to increase its business activities. The announcement came yesterday at the first meeting of Brega’s recently reformed management board. Brega is a wholly Libyan owned subsidiary of the NOC tasked with the importation and distribution of fuel, lubricants and cooking gas within Libya.
At Sunday’s board meeting, Brega revealed that it has wide strategic expansion plans to start new activities in building and owning refineries both domestically and internationally.
It also announced that it has plans to own petrol stations, fuel transportation fleets as well as overseas investments. Brega also announced that its nation-wide database for its employees’ health system is nearing completion expected to be launched this July.
Brega did not give any in-depth details of its expansion plans nor did it explain how it was planning to finance them. It also did not clarify if these new projects would continue to be wholly state-owned or would involve any partnerships with the Libyan private sector.
It is not clear if Brega will be able to implement its plans in the very short term with Libya’s acute financial crisis. Moreover, such expansion plans would need a clear and strong political mandate and Libyan social contract – something that Libya lacks during its current unending political interim period.
Historically, Brega was set up in 1971 shortly after the onset of the Qaddafi regime to distribute fuel, gas and lubricants domestically. With the deficit of Libya’s domestic refining capacity and the country’s increased fuel consumption, Brega was subsequently mandated in 2009 to import any fuel, gas and lubricant deficit to meet local consumption.
However, it is not clear if an expansion by Brega into refineries and petrol stations would create a duplication of efforts and a conflict of interest with other existing Libyan state entities. It will be recalled that with the establishment of the Libyan African Investment Portfolio and its Tamoil/Oil Libya subsidiaries, (a subsidiary of Libya’s sovereign investment fund, the Libyan Investment Authority (LIA), Libya gained the ownership of refineries and over 1,000 overseas petrol stations. Tamoil/Oil Libya could argue that it is best and better placed to implement any new investments in petrol stations.
From a social contract point of view, it is not clear that the Libyan public is interested in further expanding the state sector and allowing state entities such as Brega to launch new investment projects – at a time when decentralization and the expansion of the private sector are considered the way forward for a post-Qaddafi Libya.
It will be noted that unlike many other Libyan state institutions such as the Libyan Investment Authority (LIA), Central Bank of Libya (CBL), Audit Bureau and the Administrative Control Authority (ACA), Brega, like its parent company the NOC, has been able to remain unified during Libya’s political polarization. Its board and its board meetings represent the whole of Libya.
