Libya Bids to Resume Oil Exports From Key Ports Within Weeks

LIBYA, Capital Markets in Africa: Libya’s National Oil Co. plans to restart oil exports from key ports “immediately” after reaching a deal with Khalifa Haftar, commander of the military forces who took control of the facilities on Sunday.

The resumption of shipments from ports including Ras Lanuf, Es Sider and Zueitina would allow Libya to double crude output to 600,000 barrels a day within four weeks, NOC Chairman Mustafa Sanalla said Tuesday in a statementon the company’s website. The move is the latest in a series of initiatives to reopen these ports that have been under force majeure, a legal term allowing producers to walk away from contractual commitments.

“Our technical teams already started assessing what needs to be done to lift force majeure and restart exports as soon as possible,” Sanalla said.

Haftar took Ras Lanuf, Es Sider ports from Ibrahim Jadran, leader of local Petroleum Facilities Guard units, giving the eastern region’s powerful military chief control of both shipping terminals and oil fields in Libya’s main producing region. While at odds with the Tripoli-based Government of National Accord under Prime Minister Fayez al-Sarraj, Haftar allowed the NOC to resume crude exports in May from Hariga, another port controlled by the former general inMoammar Al Qaddafi’s regime. 

Tracking Tanker
“It’s one thing to say that exports will resume, it’s a different thing for all the stakeholders to agree on the actual resumption,” said Riccardo Fabiani, senior North Africa analyst at Eurasia Group. “I am skeptical this will happen.”

A crude tanker coming from Trieste, Italy signaling Ras Lanuf was due to arrive at the port later today, according to ship-tracking data.

The ports of Brega and Zueitina are also now under Haftar’s command, Agence France Presse reported, citing Moftah al-Magrif, an official at the Petroleum Facilities Guard.

It appears that the force majeure at Zueitina has been lifted, Ramadan Lefkaih, head of port’s labor union, said by phone.

These ports have been shut amid the violence and political infighting that has gripped the country with Africa’s largest oil reserves following the toppling of Qaddafi five years ago. 

Production Outlook
Separately, Nagi Elmagrabi, head of the NOC in the east of Libya, said he plans to meet with his Tripoli counterpart Sanalla next week in an effort to unify the company under one management.

The NOC said it expects the deal with Haftar’s Libyan National Army will allow crude production to reach 950,000 barrels a day by the end of this year. Before the Arab spring that swept through the Middle East and North Africa in 2011, Libya pumped 1.6 million barrels of crude a day.

Source: Bloomberg Business News