Benghazi residents and Libyan security forces gather around a burning car after an explosion killed the military prosecutor for Western Libya Youssef Ali al-Asseifar on August 29, 2013. Asseifar was probing several cases involving officials from the toppled regime of long-time dictator Moamer Kadhafi. AFP PHOTO/ABDULLAH DOMA Image Credit: AFP

Tripoli: No end is in sight to the worst disruption to Libya’s oil industry since the civil war in 2011 as armed groups, security guards and oil workers with tribal loyalties shut down pipelines and oil ports across the country.

Central state power is already tenuous and separatist groups are exploiting the stoppages, but the government risks bloody clashes with tribal militias if it sends ill-equipped nascent army units to capture oil terminals held by armed groups.

“These militias are intoxicated with power,” said a senior Libyan official, adding that Prime Minister Ali Zeidan’s strategy was to appease oil workers and apply tribal mediation with caveats and incentives to end the standoff.

Zeidan, accused of allowing corruption to flourish, can ill afford to prolong a crisis that the government says has already cost more than $2 billion (Dh7.34 billion), threatening Libya’s healthy foreign currency reserves, power supply and remnants of law and order.

Libya’s oil production has fallen to just over 10 per cent of capacity due to a month-long disruption by armed security guards who shut the main export ports in the east and centre over pay demands.

In the past week the strikes have spread to the western coastal ports and armed groups have also closed taps on pipelines from major oil fields, threatening the major north African oil producer with economic paralysis.

“It’s a tribal war to terminate the political process. They want a body that represents the tribes,” Noman Benotman, president of Quilliam, a counter-terrorism think tank, said.

“Practically the government is dead, technically it is still there.”

Calls for federal rule have become stronger since Gaddafi’s overthrow in 2011, fuelled by complaints in the east that it has not been given a fair share of Libya’s wealth, and the weakness of the central government.

Any military move by Tripoli to deploy troops to retake control of the port terminals would be “considered a declaration of war”, federalist Ebrahim Al Jathran told cheering crowds gathered in the eastern coastal town of Ajdabiyah on Monday.

Al Jathran, ousted this month as chief of the Petroleum Facilities Guards in the eastern region for leading strikers, is head of a self-governing political council announced in the oil town of Ras Lanuf on August 17.

The federalists say they are not separatists and only want a bigger role and better distribution of wealth.

Despite tough talk of bombing any tankers that tried to ship oil bought independently of the state, Zeidan has steered away from any mention of sending the army to capture the oil fields, saying he sought a peaceful end to the stand-off.

“Those who expect the government to resolve the security situation overnight are not seeing the situation clearly,” he said on Wednesday.

Industry executives give countless examples of how armed groups and tribal militias disrupt work in oil fields as far away as Al Feel and Essharara in the southwest to Sarir, Amal, and Nafoora in the southeast.

Some demands are purely monetary.

In the giant Al Feel field in the deep southwest, local and foreign workers are confined to camp as militias from the desert area negotiate in the town of Zintan, around 136km southwest of Tripoli, with a government-backed military council on how much they must get to end a siege of the pipelines, a Western based oil company executive said.

Bentoman said central power stretched only to Misrata in the east and Janzour in the West. “Outside, they have no power without authorisation of local leaders. The southern part of Libya is the wild west. There is no presence of government.”

Even on the outskirts of Tripoli, the country manager of a supplier of oil equipment said it was forced to enlist members of a militia to guard the company.

“You don’t need to call all the staff to get a strike, just five disgruntled people can disrupt work,” he said, on condition of anonymity.