Al-Hdhiri: Transparency in Libya’s Oil Sector… Is It Really There, and Is It Beyond Criticism?

By: Oil Legal Expert Othman Al-Hdhiri

The National Oil Corporation is one of Libya’s most important sovereign institutions, not only because it manages the country’s main source of public revenue, but also because it deals with a resource owned by all Libyans. Therefore, questioning transparency and governance within the Corporation is not an accusation against anyone. It is an inherent right of citizens and a necessity for protecting the Corporation itself from suspicion and political disputes.

To be fair, it must be acknowledged that the National Oil Corporation has taken clear steps toward greater disclosure in recent years. It has begun publishing reports on its website covering production and revenues, as well as details of oil revenue transfers to the Central Bank of Libya. It has also announced procedures related to procurement and fuel supplies on several occasions. However, disclosing some data does not necessarily mean that the transparency and governance framework is complete.

Does the Corporation Meet Governance and Transparency Requirements?

The real standard is not simply the publication of news or statements. Rather, it is whether citizens, oversight bodies, and specialists can trace the entire public money cycle—from production and measurement to exports, sales, collection, and transfers to the Central Bank of Libya and the public treasury—and then determine how the funds are spent.

This highlights the need for greater systematic disclosure, particularly since the International Monetary Fund recommended in its 2025 report that Libya adhere to the standards of the Extractive Industries Transparency Initiative, prioritizing the production of accurate data on oil production and exports. It also recommended strengthening the governance framework of the National Oil Corporation, clearly separating the oversight role of the board of directors from that of executive management, establishing transparent criteria for selecting leadership at the level of the Corporation’s departments and its companies, strengthening the independence of board members, and establishing independent risk management, audit, and compliance functions.

These are important international recommendations because they mean that the challenge is not simply about publishing figures, but about building an institutional system that can be independently verified.

What About Contracts and Sales Operations?

Oil contracts are not merely commercial documents. They are directly linked to the state’s rights and its share of its natural resources. Therefore, publishing contracts, agreements, and licenses is considered one of the most important tools for enabling citizens to understand companies’ obligations, the state’s rights, and the expected revenues from each agreement.

Accordingly, the requirement is not merely to announce that a contract or agreement has been signed, but to make available the essential information needed to evaluate it, including the parties involved, duration, obligations, financial share, cost-recovery terms, investment commitments, and audit and oversight mechanisms.

As for the claim that the Corporation’s contracts are credible, this cannot be regarded as an absolute professional judgment without making the contracts and their annexes available to oversight bodies and subjecting them to independent legal, financial, and technical review.

Oil Sales and Product Purchases… Where Does Trust Begin?

In the area of crude oil sales and the purchase of fuel and petroleum products, transparency becomes even more important because of the enormous financial values involved and the sensitivity of global prices.

The Corporation announced in 2026 that oil sales and product purchases are conducted through the Libyan Foreign Bank and under the supervision of the relevant authorities. It also announced the end of the swap system in March 2025 and the transition to a mechanism based on letters of credit for fuel purchases. The important question remains: Has the Attorney General’s directive in this regard been implemented?

The fuel import file also witnessed a shift in 2026 toward direct tenders, with international commercial companies entering supply operations, while the Corporation still deals with small-scale companies in this field. We do not know why this insistence continues.

These are steps that could enhance transparency, but the final standard is whether tender results are published in a verifiable manner: Who submitted bids? Who won? At what price? What quantities? What specifications? And on what basis was the winning bid selected?

True transparency does not simply say, “We held a tender.” It allows an observer to understand how the tender was conducted and why a particular bid won.

Do Oil Figures Match Those of the Central Bank of Libya and the Ministry of Finance?

This is one of the most important areas that should be transformed into a unified and regular disclosure system.

The Central Bank of Libya published detailed data on oil revenues and royalties transferred to it during 2025, totaling approximately $22.05 billion, including around $18.79 billion in oil revenues and approximately $3.26 billion in royalties, according to the bank’s statement covering the period from January to December 2025.

The bank also published interim figures for oil revenues in its periodic bulletins, reaffirming its intention to increase the level of disclosure and transparency.

However, professional comparison should not stop at matching one total figure with another. What is required is a monthly, auditable reconciliation between the National Oil Corporation, the Central Bank of Libya, and the Ministry of Finance, covering exported volumes, selling prices, shipment values, collection dates, commissions and expenses, and transferred revenues and royalties.

The easier it is for citizens and independent auditors to move from the production figure to the export figure, then to the sale value, and finally to the amount deposited into the state’s account, the stronger confidence will become.

Do Crude Oil Sales Revenues Comply with International Standards?

International standards do not simply mean that money has entered an official bank account. They require a documented and auditable chain beginning with production measurement and ending with the recording of public revenue.

This is where the importance of applying principles related to the accuracy of production, export, and revenue data comes in—an issue explicitly highlighted by the International Monetary Fund in its recommendations for Libya.

Therefore, the right question is not: “Do we trust the Corporation?”

Rather: Does an independent system exist that makes trust based on verifiable data instead of personal confidence?

Training and Official Assignments

In the area of training, there are publicly announced positive indicators. The Corporation has announced training plans that include electronic monitoring and measuring the impact of training. It has also implemented programs in cooperation with international companies and emphasized in 2025 the importance of providing fair training opportunities for employees. The Corporation has also announced its interest in developing internal audit and compliance and obtaining international professional certifications.

However, the transparency standard in this area also requires publishing the criteria for selecting beneficiaries of overseas training, the cost of programs, the number of beneficiaries, the implementing entity, training outcomes, and the criteria for selecting employees for official assignments, travel, and secondments.

Do training centers have credibility, and who owns these centers and what entities are they affiliated with?

Training is not an administrative privilege, and official assignments are not a channel for favoritism. Both involve public spending and should therefore be subject to clear and auditable standards.

Subsidiary Companies… The Area That Needs More Light

As for companies wholly or partially owned by the Corporation, their level of transparency should be no lower than that of the parent institution.

Citizens need to know each company’s production, operating costs, maintenance programs, capital expenditures, production shutdowns and their causes, service contracts, business results, and ownership shares in joint ventures.

It is not enough to announce an increase in production or the completion of a maintenance project. Specialists should be able to compare costs with results and determine whether the money spent on maintenance actually improved readiness and production and extended the lifespan of assets—and, most importantly, determine the cost of producing each barrel.

This highlights the importance of the International Monetary Fund’s recommendation to expand oversight bodies’ access to information concerning state-owned institutions and companies and their subsidiaries.

What I Would Like to Emphasize: Criticism Does Not Mean Accusation

The National Oil Corporation is not above criticism, nor is it being accused simply because society is demanding greater disclosure.

Fairness requires acknowledging that there has been notable progress in publishing data and announcing revenues, training programs, and tenders, and that the Corporation has taken steps toward strengthening internal audit and compliance.

But fairness also requires saying that the level of transparency expected from an institution managing the largest resource belonging to Libyans must go beyond general statements to transparency that can be independently verified and audited.

The path to trust is not to ask citizens to trust. It is to give them the tools that enable them to verify.

Therefore, what is needed today is not a campaign against the National Oil Corporation, but a national oil transparency project based on publishing key contracts, tender results, production and export data, sales prices, transferred revenues, budgets of subsidiary companies, maintenance costs, training programs, and official assignments, while subjecting these data to independent and regular review.

If the figures match, contracts are made available, sales and purchasing mechanisms become clear, and the dinar and dollar can be traced from the well to the public treasury, criticism will no longer be viewed as casting doubt on the Corporation, but rather as part of protecting it.

Transparency is not a condemnation of management, and oversight is not hostility toward the institution. The best management is one that does not fear having its figures, contracts, and decisions examined in accordance with laws and regulations.