Libya Peace Seen Complicated by Oil Cargo From Rebel Port
The prospect of a deal between Libya’s central government and a group controlling oil ports in the country’s eastern region is fading after the rebels shipped a first cargo of crude.
A North Korean-flagged tanker left Es Sider, the largest oil-export terminal two days ago after the navy refused to attack the vessel and failed to impound it. Libya’s parliament then ousted Prime Minister Ali Zaidan in a no-confidence vote. Federalists in the eastern Barqa region, also known by its historic name Cyrenaica, control four of the country’s nine oil ports and demand a share of the export revenue.
“This will complicate a settlement because it emboldens the Barqa people,” said Theodore Karasik, the director of research at the Dubai-based Institute for Near East and Gulf Military Analysis. “It shows their ability to operate independently from the central government.”
Libya’s central government has been hobbled by a lack of oil revenue since the ouster of Muammar Qaddafi in 2011. Crude production slumped to 350,000 barrels a day last month, from an average of 1.59 million barrels in 2010. The deadlock in Libya also has global implications, with Citigroup Inc. analysts citing it as one of the reasons they raised their 2014 forecast for Brent crude to $103 a barrel, from $93, last month.
Zaidan’s replacement by Defense Minister Abdullah Theni signals a hardening in the government’s stance, Karasik said. Authorities in the capital Tripoli gave the rebels a two-week deadline yesterday to surrender the export terminals they’ve occupied since July, the state news agency Lana reported. The government also asked neighboring Egypt, which controls the Suez Canal linking the Mediterranean Sea and Red Sea, to stop the tanker if it enters Egyptian waters.
North Korea’s Maritime Administration said it canceled the registry of the tanker Morning Glory after receiving a notice from the Libyan government. The vessel is operated by Golden East Logistics Co. and had contracted to use the North Korean flag for six months, it said yesterday in a statement on the official KCNA news agency.
A freight forwarding company with the same name is registered in Alexandria, Egypt. Mustafa Hammoud, its director general, said today by phone that it doesn’t operate the ship and isn’t involved in transporting oil.
The eastern rebels may struggle to export more oil because the U.S. declared the cargoes illegal, Karasik said. The crude exported from Es Sider was produced by a joint venture between Libya’s National Oil Corp., Hess Corp., ConocoPhillips and Marathon Oil (MRO) Corp., according to National Oil Corp., the state oil company. The rebels said yesterday that the U.S. companies will get their share of any payments.
NOC said the Morning Glory has a capacity of about 350,000 barrels, which would value the cargo at about $38 million.
Ali Al-Hasy, a spokesman for the Executive Office for Barqa, the region’s self-declared government, said the tanker was full and had reached international waters. He declined to identify the ship’s owner or its destination.
The Barqa rebels, led by Ibrahim Al Jedran, a former commander of the Petroleum Facilities Guards, are demanding a 15 percent share of national oil revenue for the eastern region. They say the territory, which has capacity to produce more than half of Libya’s oil, was neglected in favor of Tripoli and other cities in western Libya under Qaddafi’s four-decade rule.
Zaidan, the ousted prime minister, refused to commit to an agreement on revenue-sharing, saying Libya must first adopt a constitution. He left Tripoli for an undisclosed destination in Europe after his removal by parliament, Lana reported yesterday.
“I do not think that Jedran would be willing to make concessions at present,” Geoffrey Howard, a North Africa analyst at London-based Control Risks, wrote in an e-mail. “He is in a position of strength, and the government appears unable to remove him.”
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