East Libya May Consider Halting Oil Loadings of Rival Cabinet

  • Libya oil output one-fifth of pre-2011 rebellion level
  • East Libya administration wants to manage oil loadings

Libya’s internationally-recognized government, based in the eastern region of the country, may consider stopping oil loadings by companies that are not cooperating with the management it has appointed for the state-run National Oil Corp, an oil official said.

“We are warning the international companies against dealing with the illegal management,” said Nagi Elmagrabi, the chairman of the NOC management based in eastern Libya, in comments to reporters in Malta. “Legal proceedings” will be first considered against these companies and, as a last resort, their loadings from the eastern region may be blocked, he said, without identifying them.

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 where some oil continues to be exported.

“We haven’t stopped these loadings so far so as not to harm the livelihood of the Libyan people, but we don’t want this illegal situation to continue,” he said.

Wednesday Meeting

NOC’s east-based management is organizing on Wednesday in Malta a conference and meetings with clients and potential partners. About 30 companies have registered to attend the event, while those that continue to deal with the Tripoli-based management have declined, saying they will agree to meetings at later date, he said, without identifying any company.

Libya, the site of Africa’s largest oil reserves, 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 fifth 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 the Organization of Petroleum Exporting Countries.

United Nations-sponsored talks held in Morocco to form a united government hit a snag when the internationally-recognized government on Tuesday said it has recalled its team after their rivals insisted on re-opening and adjusting the "near-final" text of the agreement.

A political accord would allow Libya to increase its output to 900,000 barrels a day from between 250,000 and 350,000 barrels a day now, after three months, as production from the western fields would resume, said Elmagrabi. The eastern region now is exporting about 200,000 barrels a day while offshore fields are shipping up to 100,000 barrels, he said.

He didn’t give a date for resuming exports from Es Sider, Libya’s largest oil terminal, and the nearby Ras Lanuf, the third-largest, both under the control of his administration. Force majeure, a legal status protecting a party from liability if it can’t fulfill a contract for reasons beyond its control, was declared at the two ports in December after they came under attacks.

The presence of Islamic State in Sirte, west of Es Sider, complicates the lifting of the force majeure, Elmagrabi said. The terror group is being fought by both administrations.

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