Libya confirmed on Wednesday that the headquarters of the state energy firm would move to the volatile eastern city of Benghazi, a response to demands for more authority for the oil-rich region which may prove a headache for international companies.
The National Oil Corporation (NOC) has faced calls since the end of the 2011 war that ousted Muammar Gaddafi to move more of its operation to the eastern region, which accounts for around 80 percent of Libya's oil wealth.
Officials have talked for months about restructuring the body under a plan that has yet to be approved by the General National Congress, Libya's highest political body.
“We will start to build the headquarters for the NOC in Benghazi. Most of the NOC will be transferred to the new headquarters,” Prime Minister Ali Zeidan told a news conference.
“This was a decision that was taken by the prime minister's office. Benghazi is a city that deserves to have such organizations as part of a process to end centralization.”
Zeidan made no detailed reference to a current plan that would split upstream activities, such as exploration and production, from downstream activities, such as refining and marketing, with the former to remain in Tripoli.
Oil is Libya's economic lifeline. The OPEC member pumps at a rate of around 1.6 million barrels per day and has made the country rich despite its troubles.
Unlike before the war when the NOC dealt with all oil matters, Libya now has an oil ministry in Tripoli which deals with regulatory affairs and decision-making.
Any move of the NOC headquarters is likely to take time and details have yet to be finalized. However the decision may be of worry to international companies for security reasons.
Benghazi is awash with weapons and has become a no-go area for foreigners since September's deadly attack on the U.S. diplomatic mission in which the ambassador and three other Americans were killed.
The wrangling over how to split the NOC has added to broader discontent in Benghazi and the east over the prospect of further marginalization by Tripoli and fuelled calls for more autonomy.
The NOC's predecessor, the Libyan General Petroleum Company, was set up in Benghazi in 1968. The NOC was established in 1970, a year after Gaddafi came to power, and relocated to Tripoli.
Separately, a group of about 70 protesters were staging a demonstration outside Libya's major El Feel oil field, with demands that included an NOC representative office in the south of the country, a senior Libyan oil industry source said.
He added that the protesters, also demanding jobs for locals as well as payment of salaries, caused no disruption at El Feel, which pumps 130,000 barrels per day and which is run by Mellitah Oil, a joint venture between the NOC and Italy's ENI.
British oil company BP earlier this month said it was withdrawing some non-essential staff from Libya after Britain's government warned about deteriorating security in the capital Tripoli.