(Bloomberg) -- Libyan factions agreed to appoint a new central bank governor, paving the way for a resolution to a row that’s slashed the OPEC nation’s oil output.
The breakthrough may lead to a steady resumption of production, which fell to about 450,000 barrels per day in the opening weeks of the month-long blockade, from more than 1 million before the crisis.
“I welcome the pledges from the the eastern authorities to reopen the oil fields shortly,” the United Nations envoy to Libya, Stephanie Koury, said Thursday at a signing ceremony for the deal in the capital, Tripoli.
The country’s rival eastern and western governments had been at loggerheads for more than a month over the leadership of the central bank, which effectively controls billions of dollars of energy revenue.
Under the agreement, Naji Issa — formerly the head of the bank’s issuance department — was nominated as governor, and Marai Al-Barasi was named his deputy. The two are supposed to choose the rest of the regulator’s board and refer it to Libya’s legislature for approval within two weeks.
The war-torn North African country plunged into fresh upheaval in mid-August when the UN-recognized government in Tripoli moved to oust Sadiq Al-Kabir as bank chief. Authorities in the east rejected the move and ordered a shutdown of all crude production and exports.
Agreeing on new central bank leadership is a major step to resolving the deadlock — and one being watched closely by oil traders. Other challenges could lay ahead in the country ravaged by fighting and unrest, where agreements are often fragile. A UN-backed cease-fire in 2020 was meant to lead to nationwide elections and a unified government, but they’ve yet to take place.
Libya’s biggest crisis in more than four years sparked intensive mediation efforts in an attempt to stop a slide back into war. The country has been dogged by sporadic violence ever since the 2011 overthrow of dictator Moammar Al-Qaddafi.
Libya’s two legislative bodies — the House of Representatives based in the eastern city of Benghazi, and the High Council of State in Tripoli — had previously agreed in theory to jointly appoint new central bank leadership, but progress had been sluggish until a Wednesday meeting, the first formal gathering since Sept. 12.
(Updates with details on the agreement.)
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