March 7 (Bloomberg) -- Captain Imad Hatali raises himself to his full six feet, eyes narrowing, as he scans the shimmering desert from western Libya’s key oil refinery.
Behind Hatali are the gleaming white storage tanks of the Zawiya refinery, which has a 120,000 barrel a day refining capacity and is run by the state-owned Zawiya Oil Refining Company. In front of him are thousands of miles of desert, the home of bandits, smugglers and suspected al-Qaeda-linked militants who in January attacked Algeria’s An Amenas gas plant and killed at least 38 foreign workers.
“Oil is the lifeblood of Libya,” said Hatali, who leads the Petroleum Facility Guard at the plant. “If anyone wants to come and attack, they will need to get through me first.”
Short of men, the government-run PFG is also handicapped by a lack of training, equipment and even uniforms -- none have been issued and Hatali’s own well-fitting U.S. Army-issue clothing is a gift from a friend. While militias supplement the guards, they’re sometimes poorly disciplined -- ENI SpA of Italy, joint operator of the Mellitah plant, halted gas exports after March 2 clashes between rival militias seeking to provide security there.
“A lot of the sites, at the major facilities in Libya, if faced by an organized and well-equipped group, would be potentially vulnerable,” said Alan Fraser, Libya specialist at the London-based AKE risk consultancy. Sites most at risk are in the east, he said, where Islamists killed U.S. Ambassador Chris Stevens and three colleagues in Benghazi in September.
Two years after the 2011 revolution that swept the late Muammar Qaddafi from power, the government is trying to revive an economy so dependent on oil that it accounts for more than 70 percent of Libya’s gross domestic product and about 90 percent of government revenue, the International Monetary Fund says. The An Amenas attack has raised questions about the ability of security forces to protect that income.
“A major attack on a Libyan oil installation would have severe consequences, not just because the country depends so much on oil exports, but because it would pull the rug out from foreign business confidence,” Duncan Bullivant, chief executive officer of Henderson Risk, a British security consultancy working in North Africa, said. “Libya desperately needs outside expertise to overhaul its oil industry.”
Overall production in Libya, which sits on Africa’s biggest oil reserves, rose to 1.38 million barrels in January, according to the International Energy Agency, and the Oil Ministry says it hopes to boost that to 2 million barrels a day by the end of 2015.
Libya announced an expansion of the PFG to 12,000 after the Algerian attack from the 3,000 it employed under the Qaddafi regime. The Defense Ministry relies on militiamen to boost numbers, and has sent militia units from Zintan to help PFG units in the southwest at the Wafa gas plant and El Feel, or the Elephant, run by Libya’s National Oil Co. and ENI.
International oil companies active in Libya also include Spain’s Repsol SA., ConocoPhillips of the U.S. and Russia’s Gazprom OAO.
The lack of government manpower was illustrated when two militias vying for the security contract for the gas facility at Mellitah, 35 miles (56 kilometers) west of Zawiya, clashed at the complex on March 2-3, causing Eni to suspend gas through Libya’s main marine pipeline to Sicily and elsewhere in Europe.
Most of the guards at Zawiya, like the plant’s employees, are recruited from what was one of the first towns to rebel against Qaddafi. The complex, 30 miles west of Tripoli, is sandwiched between Zawiya town, through which runs the east-west coastal highway, and the sea.
Troops man checkpoints at the plant entrance, amid sandbags and razor wire and backed by six new white pickups, each mounting 14.5mm (.57 caliber) anti-aircraft guns.
Inside their headquarters, the guard has a recently installed security system, featuring 16 separate camera points, each equipped with night vision, allowing the control room to simultaneously monitor the entire perimeter.
Zooming in on a fishing boat passing by the terminal, computer programmer Hassan Bashir, 22, checks the boat’s number and a simulated alert is passed to coastal patrol craft. Then, demonstrating how cameras move on command, and switch from day to night vision, he says: “You could see a mouse on these screens.”
There is also a threat to the pipelines running to fields in the south west. Along the roadways that follow the pipelines, local tribes have built shacks, creating cover should terrorists decide to strike.
“We want the shacks moved, we need to ensure we can patrol,” said Abdul Hamid El Bari, commander of the PFG’s Western Division.
Yet anti-government protests have been the main cause for concern at Libyan facilities, Fraser said.
In June, militias occupied three eastern terminals, halting production for 48 hours in an election protest. In December, the Zueitina refinery, 600 miles east of Tripoli, was shut down until late January after protesters occupied the control room. Zawiya was closed on Dec. 1 by wounded war veterans demonstrating outside the gates claiming non-payment of pensions, though the security men took no action to clear the road because they sympathized with protesters, Security Coordinator Mahmoud Mohammed Ali said.
The plant guards accept that they need extra time to become more professional, but say that requires more help from outside.
“Look around you, our spirit is good, many of us were former rebels,” says Captain Hatali. “If we are well-trained we can do more than this.”
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