Libya’s biggest oil port may reopen, as groups vie for buyers
MAHER CHMAYTELLI
AL-BAYDA, Libya (Bloomberg) -- Libya’s biggest oil port may reopen in two weeks, as fighting in the area recedes amid increasing competition between the divided North African nation’s rival governments for the control of crude exports.
Al Mabrook Bu Seif, the chairman of state-run National Oil Corp. appointed by the elected government in the east of the country, said his team will start contacting existing clients to coordinate crude loadings at oil ports, replacing the company’s rival management in the capital, Tripoli, where a cabinet backed by Islamist militias is ruling over most of the western region.
“Our management and marketing team are ready to deal with our existing clients and partners,” Abu Seif said in an interview Saturday in the eastern city of Al-Bayda, the seat of the internationally recognized government of Abdullah al-Thinni. “We will start contacting them today,” he said, without mentioning specific companies.
Libya, holder of Africa’s largest oil reserves, has been split since last year when a coalition of Islamist militias captured Tripoli, forcing the elected government to move to the eastern region. The conflict has damaged or shut oil fields, pipelines and ports.
Force majeure may be lifted in two weeks on loadings at Es Sider, Libya’s largest export terminal, and at neighboring Ras Lanuf, the third-largest, as Islamist militias pulled out from the region, signaling the end of a campaign they began in December to capture the two ports, said Abu Seif, whose team operates from Ras Lanuf. He called on buyers to also coordinate with his management for loadings at the two ports under the control of the Tripoli-based government, in the western region.
Ports Loading
Es Sider, with a loading capacity of 340,000 bopd, needs at least one month to resume exports as pipelines around storage tanks have been damaged and electrical supply cut by militia attacks, the port’s emergency team chief Abdulwahed al-Sheikhy said by phone on Friday. Of its 19 storage tanks, 10 are intact, containing 2.14 MMbbl of crude ready for export, he said. Ras Lanuf, with a loading capacity of 220,000 bopd, suffered no damage.
Al-Thinni’s cabinet on Saturday authorized its management at NOC to open a bank account in the United Arab Emirates, the Libya News Agency reported, citing a government statement. They also authorized NOC to swap crude exports for gasoline imports in order to ease a local shortage of fuel, it said.
Oil Payments6
The statement didn’t say if the opening of a U.A.E. bank account was meant to bolster the Al-Thinni government’s ability to get funding. Libya’s central bank, where oil buyers transfer their payment under the existing system, has refused to take sides and currently only pays expenses approved before the country split up.
Al-Thinni’s administration is preparing for the reopening of Es Sider and Ras Lanuf oil ports, even if the emergence of a militant armed group affiliated with Islamic State derails operations at the terminals, Al-Thinni said at a news conference in Al-Bayda on Saturday.
“We authorize National Oil Corp. to start preparing for a resumption of exports from the Oil Crescent,” he said, referring to the name of the region around Es Sider. “Daech’s activities in the region are a threat,” he said, referring to Islamic State.
Libya has become one of the smallest producers in the Organization of Petroleum Exporting Countries, with a daily output of 500,000–600,000 barrels, compared with about 1.6 MMbopd before the 2011 rebellion that ended Muammar Qaddafi’s 42-year rule.
Al-Thinni’s government controls five of Libya’s nine oil-export terminals, while the Islamist-backed administration of Omar-al-Hassi controls two—Zawiya, the country’s second-largest, and Mellitah, the fourth-largest. The remaining two are offshore loading platforms.
