New Libya Oil Chief Mulls Resuming Exports at Eastern Ports

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The new head of the state oil company for eastern Libya is considering restarting exports from the region’s two largest ports and plans to boost crude output.

“Among my priorities will be lifting force majeure at Es Sider and Ras Lanuf,” Nagi Elmagrabi, chairman of the National Oil Corp. for the eastern region, said in a phone interview Tuesday. “I will also seek to increase oil production.”

Libya pumped about 1.6 million barrels a day of crude before the 2011 rebellion that ended Muammar Qaddafi’s 42-year rule. Output fell to a quarter of that level this year as militias affiliated with rival governments in the east and west of the country fought for control of oil resources. Tribes and workers seeking jobs and better pay have also blocked operations at fields and pipelines, making the country the smallest producer in OPEC.

The North African nation stopped crude exports from the two ports in December after militias attacked Es Sider, its largest oil terminal. The NOC declared force majeure, a legal status protecting a party from liability if it can’t fulfill a contract for reasons beyond its control, at the two ports the same month.

Elmagrabi, an engineer with 26 years of experience in the oil industry, said he plans to meet the head of the Petroleum Facilities Guard, Ibrahim al-Jadran, to assess the security situation and the possibility of resuming exports from the two terminals. Ras Lanuf is Libya’s third-largest oil port.

Tribal Conflicts

NOC will seek to increase crude output from fields in the eastern region, where about half of Libya’s current production is located, with the remainder produced offshore, Elmagrabi said.

Brent advanced 35 cents, or 0.7 percent, to $50.34 a barrel on the London-based ICE Futures Europe exchange at 12:33 p.m. Singapore time on Wednesday.

Tribal and political disputes have almost completely halted onshore crude production in the western region, where an administration backed by moderate Islamist militias has held sway since last year. Libya’s internationally recognized government operates from al-Bayda in the east.

United Nations-sponsored talks on forming a unity government reached a stalemate after the Tripoli-based administration last month rejected a settlement proposal. The UN’s Libya envoy Bernardino Leon on July 31 met a delegation representing the Tripoli administration in an effort to restart the peace process.

Ras Lanuf

Oil operations in the capital and the western region are run by NOC Chairman Mustafa Sanalla. The company’s Tripoli-based management attempted to lift force majeure at Ras Lanuf last month and ship-tracking data showed two vessels headed for the terminal, prompting threats from the eastern arm of NOC that any ships entering the facilities would be impounded.

Elmagrabi said his appointment as chairman of NOC for the eastern region will take effect later this week. His predecessor, Al-Mabrook Abu Seif, said by phone on Monday that he will return to his previous job as director of computerized operations at Sirte Oil Co., a unit of NOC. Seif led the company’s eastern management since the country split between two administrations last year.

Most of the crude production from the eastern region comes from Arabian Gulf Oil Co., an NOC unit where Elmagrabi worked as director for oilfield facilities until his appointment as head of the eastern-based management of NOC.

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