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East Libya Rebels Commit to Keep Open Largest Crude Export-Port

Rebels in Libya’s east committed to keeping open the country’s largest oil port, Es Sider, and dissociated themselves from a protest that shut a smaller crude export terminal. Brent traded near the lowest in three months.

“This incident, in the port of Brega, has no impact on the agreement with the government to open Es Sider and Ras Lanuf,” said Ali al-Hasy, a spokesman for the self-declared Executive Office for the Barqa region. “We stand by the agreement with the government. Es Sider and Ras Lanuf will stay open.”

Es Sider and Ras Lanuf, Libya’s third-largest oil port, have a combined daily loading capacity of 560,000 barrels. Brega, which was reported July 12 to have been shut by guards seeking better pay, can export 60,000 barrels a day, according to the Oil Ministry.

The Executive Office for Barqa seeks self-rule for the eastern region also known as Cyrenaica. It took control of four oil ports about a year ago, handing back two of them to the government in April and the remaining two this month.

Although located in eastern Libya, Brega was not among the four ports that fell under the rebel group’s control, and it continued to supply a refinery controlled by the government in the nation’s western region.

The July 3 agreement under which Barqa rebels agreed to surrender Es Sider and Ras Lanuf helped push Brent crude prices lower. The benchmark grade for more than half of the world’s oil closed at $106.66 a barrel on July 11, its lowest in three months. The August contract traded as low as $106.27 a barrel today in London.

Africa’s Largest

“The Executive Office for the Barqa region doesn’t command the guards in Brega, they acted on their own,” said al-Hasy. “We are nevertheless mediating with them to re-open the port. This may happen in the coming hours, God willing.”

The holder of Africa’s largest oil reserves, Libya’s output has dwindled in the past year to make it the smallest producer in the Organization of Petroleum Exporting Countries. The government is struggling to restore its authority over armed groups that took part in the 2011 rebellion that ended Muammar Qaddafi’s 42-year rule.

The country’s daily production rose to 470,000 barrels from 350,000 barrels on July 10, as Repsol SA (REP) boosted output from the Sharara field, Mohamed Elharari, a spokesman for state-run National Oil Corp., said by phone. The shutdown at Brega could reduce output by 40,000 barrels a day, he said.

Sharara, the largest field in western Libya, resumed production last week after a four-month halt as protesters allowed a pipeline carrying its crude to re-open.

The Executive Office for Barqa relinquished the ports in return for a government promise to pay the salaries of Petroleum Facilities Guard members who defected to join the rebels, and as a goodwill gesture after last month’s parliamentary elections. The group hopes that members of the new national legislature will support its demand for an oil-revenue-sharing agreement for the Barqa region to help compensate for the neglect the area experienced under Qaddafi.

To contact the reporter on this story: Maher Chmaytelli in Dubai at mchmaytelli@bloomberg.net

To contact the editors responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net Pratish Narayanan, Mike Anderson

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