Jan. 8 (Bloomberg) -- Rebels in east Libya, who last year declared the region semi autonomous, said oil companies are eager to buy their crude and offered to protect tankers after the government’s navy blocked one such vessel from loading.
“Companies are fighting to make contracts,” Salem Al Jedran, whose brother Ibrahim is the self-appointed leader of Cyrenaica, Libya’s eastern coastal region, said by phone today. “We will use Es Sider, Hariga and Ras Lanuf,” he said, referring to three of the country’s largest export facilities that have been disrupted since the middle of last year.
The region’s Libyan Oil and Gas Corp. sent a letter to international oil companies yesterday offering to ensure the safety of tankers loading at Es Sider, the biggest port. The notice was distributed days after a vessel was stopped from going to the facility by the central govermnent’s navy. Libyan Prime Minister Ali Zaidan said today that any tanker loading illegally sold crude would be sunk.
“Regional leaders will claim foreign companies would want to buy from them, but it’s not likely,” said Amrita Sen, chief oil market strategist at Energy Aspects Ltd., a consulting company in London. “It’s very risky, and the fact is that they won’t be insured.”
Brent crude, the North Sea benchmark used in more than half the world’s oil contracts, traded at $14.08 a barrel more than West Texas Intermediate, the key U.S. grade, as of 2:52 p.m., in London, compared with $13.44 yesterday. The two were close to parity in July last year when the disruptions escalated.
Closing ports in the east has cost Libya $10 billion in revenue, the state-run Libya News Agency reported Dec. 30, citing Economy Minister Mustafa Abu Fnas. Crude is the country’s largest export earner and production slumped 210,000 barrels a day last month from 1.4 million barrels a year earlier because of port blockades and oil-field disruption.
Libya produced more than 500,000 barrels a day on Jan. 6 as its Sharara field and deposits elsewhere resumed pumping, according to nation’s oil ministry. Sustained output at that level would mark the first increase in 10 months, according to data compiled by Bloomberg.
“This whole issue between the Libyan government and East Libyan rebels is taking a new turn and is generally indicative of no resolution to the Libyan crisis in the near future,” Abhishek Deshpande, an oil market analyst at Natixis SA in London, said in an e-mail. The government “is unlikely to accept or give autonomous status to East Libya.”
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