Libya's Biggest Port Loads First Oil Tanker Since Clashes

  • Tanker Demetrios said planning to sail to China after loading
  • Country’s oil output rebounds to level before Es Sider battle

Libya’s biggest oil terminal loads its first tanker since fighting between armed groups earlier this month halted shipments from two ports in the country with Africa’s largest crude reserves.

The Suezmax vessel Demetrios, which can carry as much as one million barrels, loaded from Es Sider for export to China, according to a person familiar with the situation, who asked not to be identified because the matter isn’t public. Fighting between rival groups erupted on March 3, disrupting output and forcing Es Sider and Ras Lanuf, the country’s third-biggest terminal, to halt shipments. Operations at both ports have since restarted after the clashes ended.

Libya’s oil production has climbed back to where it was before the battle for control of the ports forced Waha Oil Co. , which feeds Es Sider, to suspend output. The country is producing 700,000 barrels a day and targets 800,000 before the end of April, Mustafa Sanalla, chairman of state-run National Oil Corp., said on March 22. Waha, a joint venture between the NOC, Hess Corp., Marathon Oil Corp. and ConocoPhillips, has resumed output and is pumping 60,000 barrels a day compared with 80,000 before the latest hostilities, Jadalla Alaokali, an NOC board member, said on March 23.

Exports from Es Sider are restarting as members of the Organization of Petroleum Exporting Countries and allied producers met in Kuwait to discuss possibly extending an output-cuts deal beyond June. The more oil Libya pumps, the greater the pressure on its fellow OPEC members as they seek to clear a global glut. The country produced 1.6 million barrels a day before a 2011 revolt sparked fighting that prompted foreign investors to withdraw, hobbling its oil industry.

Demetrios went to a single port mooring facility over the weekend and has since moved away, according to vessel tracking data compiled by Bloomberg. It is now indicating a draft of 11.5 meters, having been at 8.5 meters before going to a single-point mooring near the port. The ship’s depth in the water indicates it has loaded at least some cargo.

The conflict in Libya has shown signs of calming in recent months, with oil output rising to 700,000 barrels a day in February from 260,000 a day in August, according to data compiled by Bloomberg. Libya’s biggest oil field, Sharara, will increase output by 70,000 barrels a day in a few weeks, from 221,000 barrels a day currently, the NOC said. Sharara in the far west of the country is operated by Repsol SA.

"Illegal" oil sale attempts

The NOC has identified a group of individuals who tried to enter into illegal contracts with unknown or unqualified companies, offering Libyan crude at “huge” discounts below its official selling price, the NOC said Sunday in a statement on its website. Completion of the contracts would have meant “hundreds of millions of dollars in lost revenue,” it said. Only NOC is authorized to sell Libyan crude, and 16 international companies have already contracted to sell Libya’s entire 2017 production, NOC said. Those companies include ENI SpA, Total SA, OMV AG, Respol SA, Rosneft Oil Co. and Glencore Plc, it said.

Authorities in eastern Libya last year tried to sell oil independently but the attempt failed after an international boycott and the tanker had to return to the country. The country split into separately governed regions in 2014, leading to the establishment of competing NOC administrations.

A deal meant to reunite the state company under a single management was signed in July 2016. The future of that accord now appears uncertain as the head of the NOC in the east said earlier this month that he was pulling out of the deal because the terms of the agreement, including the transfer of the company’s headquarters to the eastern city of Benghazi, have yet to be met.

    Before it's here, it's on the Bloomberg Terminal.