After Malta agreement, Zeidan returns to security and oil crisis

Libyan Prime Minister Ali Zeidan is facing growing unrest within his coalition government, as the country's oil export terminals remain closed and there seems to be no end to the recurring power cuts and water shortages.

In recent weeks, Zeidan has come under intense pressure for failing to resolve the security problems, and particularly his failure to set up unitary army and police forces.

The deteriorating security situation in Libya has led to an almost complete suspension of its oil exports, since armed militias took over the country's main ports and oilfields, while insurgents have also destroyed power plants and carried out several assassinations of key political figures.

The uncertainty has led to Libya's four major allies - the US, UK, France and Italy - to issue a joint statement urging Libyans to get behind Zeidan and put the national interest first.

The four countries expressed their concern about the oil blockades and called on Libyans to avoid divisions and stand behind Zeidan in his efforts to resolve the oil crisis.

Moreover, while recognising Libya's challenging transition to democracy, the US, UK, France and Italy said they would "continue to work closely with the government of Libya in its efforts to restore security, build its institutions and deliver vital goods and services to the people of Libya".

Renewed calls for Zeidan's resignation came days after he signed a memorandum of understanding (MoU) with his Maltese counterpart, Joseph Muscat, on the provision of oil products at preferential rates.

However, following the signing of the agreement, Zeidan's position is under threat, as the strikes at oil export terminals, which have so far cost Libya over €3.8 billion in losses, have undermined his authority in a country which still coming to terms with democracy after the 40-year Gaddafi dictatorship.

Doubts exist on Libya's ability to provide the necessary amount of oil needed by Malta in 2014, before energy production is switched to gas the following year; and the MoU has not been spared criticism in Libya either.

Zeidan has been accused by his political opponents and sectors of Libyan society of giving more importance to foreign affairs than internal ones.

The Libya Herald reported that Zeidan's intention to sell oil to Malta at discounted prices did not go down well in Libya.

"Zeidan has made Libya into a charitable organisation called The Libyan Zeidan Charity," one woman, who works at the Wahda Bank, was reported as saying by newspaper. "Following his decision to sell Libyan oil to Egypt on rather easy credit terms, Zeidan is now selling Libya's oil to Malta at low cost and assuring the Maltese people that their electricity bills and petrol prices will fall starting from March of next year."

Libya's central bank has already warned that if the situation remains unchanged, the country could lose multibillion oil export contracts with foreign firms. The Finance Minister, Abdelkarim Kilani, said that inevitably, the loss of oil production would "affect revenues for the 2014 budget".

Additionally, central bank officials said the government's ability to pay civil servants would also be severely affected if the issue is not resolved before the end of the year.

Naji Mokhtar, head of the energy committee in the Libyan Parliament, said the strikes at ports are also choking imports of diesel and fuel oil for electricity plants, leading to rolling shortages.

In recent weeks, Libya has suffered a series of energy and water shortages, while oil production has been grounded to a halt after armed militias blockaded oil fields and terminals.

Although the water shortages were seemingly being resolved this week, Bilqasim Shindeer el-Shibany, a board member of Libya's National Oil Corp, told The Associated Press that oil exports almost entirely have stopped.

Late last month, officials said exports stood at around 300,000 barrels per day, down dramatically from pre-civil-war levels in early 2011.

Furthermore, the closure of onshore oil facilities has driven down production to just 130,000 barrels per day, unofficial sources said.

Last week militias closed the oil pipelines from the al-Sharara and al-Fil oil fields in southern Libya, which have a production capacity of about 500,000 barrels per day, amounting to roughly one-third of the country's production capacity. The militias also prevented the delivery of crude oil to the ports, and oil workers have been prevented from exporting oil from Marsa al-Brega port for nearly a month.

Adding to Zeidan's woes, one of the key coalition partners in the Libyan government is threatening to withdraw. In recent months, the Justice and Construction Party's interior and electricity ministers stepped down, due to what they termed as Zeidan's "interference" in their affairs.

The Islamist Justice and Construction Party has stepped up its criticism of Zeidan's leadership and threatened to withdraw its four ministers from the government.

Its leader, Mohammed Sawan, accused the government that it is not moving in the right direction and of having no will to resolve the central challenges such as the formation of the army and police, local administration and an effective foreign policy.

Speaking at a press conference last week, Sawan said, "The two main problems with electricity and oil are both security related. The oil minister is supposed to ensure the administration of the oil companies and be responsible from the extraction of oil to the delivery to the storage tanks. The problem is the government cannot ensure exports and it is a security failure.

"Similarly, the electricity minister is not responsible to secure power plants from bomb attacks or to stop people from sabotaging the cables. The prime minister is directly responsible for both these issues."

Also, Zeidan's recent visit to Egypt angered the Justice and Construction Party, which threatened to pull the plug on the government in protest to the prime minister's meeting with Egypt's military leaders, including the commander-in-chief of the Egyptian Armed Forces, Gen. Abdel-Fattah El-Sisi.

Zeidan's unexpected visit provoked the ire of Egypt's Muslim Brotherhood, which has held violent protests against the Egyptian military, which is accused of mounting the military coup against the ousted Islamist president, Mohamed Morsi, in June.

This led to the Muslim Brotherhood's branch in Libya to accuse Zeidan of supporting the illegal removal of the former Egyptian president, however this is not the first time the party has threatened to withdraw from the interim government.

However, Zeidan vehemently defended his two-day visit to Egyptian officials and insisted that the Islamists' attack was uncalled for. Zeidan said that his only intention was to serve the Libyan national interest. "It is no secret that the Muslim Brotherhood group in Libya acted against me from the start, but I always tried to reach out to them for the sake of national unity."

Zeidan added that when he ran for office last year, the fiercest opposition emanated from the Muslim Brotherhood group and the Justice and Construction Party.

"When I declared my candidacy they did whatever they could to prevent me from getting the post," Zeidan said, noting that when he formed the interim government, the Islamists reluctantly accepted the ministries of oil, economy, youth, housing, electricity and one of the deputy prime ministerial posts.