Libya Vows to Block Tanker Attempt to Lift Oil in Rebel Port

Libya’s government vowed to prevent a tanker from leaving a rebel-held oil port as it struggles to reassert control over the nation’s main source of revenue. The vessel arrived on March 8 in Es Sider, the nation’s largest oil-export terminal, after Libyan armed forces refused government orders to fire on the ship, Prime Minister Ali Zaidan said in Tripoli, the capital. Air force officers told Zaidan they didn’t want to risk harming civilians or causing an oil spill, the Libya Herald newspaper reported. Navy vessels have moved to stop the tanker from leaving, Culture Minister Habib Lamin told a news conference yesterday. “The government should now actively seek a solution” with rebels in the self-proclaimed eastern region of Barqa, Asma Sraibah, a member of parliament, said yesterday in a telephone interview in the capital city. “It would be a disaster if the government loses its main source of revenue.” Libya’s inability so far to restore oil exports from its eastern terminals is among the reasons Citigroup Inc. raised its 2014 forecast for Brent crude to $103 a barrel from $93 a barrel on Feb. 25. The country pumps about 235,000 barrels a day compared with 1.4 million barrels a day last July, when four of its nine crude-exporting ports were shut by forces led by Ibrahim Al Jedran, a former commander of the Petroleum Facilities Guard and founder of the Barqa Executive Office.

U.S. ‘Concerned’

The U.S. State Department said it was “deeply concerned” that the tanker was loading crude produced by a U.S.-Libyan joint venture without its authorization. Any buyers of this oil would incur penalties, it said in a statement yesterday. Brent futures trading on the London-based ICE Futures Europe exchange fell 0.9 percent to $108.05 a barrel at 6:47 a.m. local time. Crude loading from Es Sider “would be significant for the oil market if it becomes regular,” Theodore Karasik, director of research at the Institute for Near East and Gulf Military Analysis in Dubai, said yesterday in a phone interview. The eastern government’s goal “is to make this regular, but it will be very difficult as Tripoli will try to interrupt the flow.” The eastern government demands that Barqa, the local name for the Cyrenaica region that usually produces more than half of the country’s oil, receive 15 percent of national crude revenue. Zaidan says he can’t commit to an agreement before the adoption of a new constitution.

North Korea-Flagged

“This is not a challenge to the government,” Aberabba Al Baraasi, chairman of the Executive Office for the Barqa Region, said at a March 8 ceremony to welcome the tanker at Es Sider. “We tried to reach an agreement, but the government hasn’t been forthcoming.” Mohamed Elharari, a spokesman at the state-run National Oil Corp., identified the ship yesterday as the North Korea-flagged Morning Glory, with a capacity of 350,000 barrels. A vessel with that name has traded East of the Suez Canal for the past two years and is not in Libya, Odysseus Valatsas, chartering manager for Dynacom Tankers in Glyfada, near Athens, said March 6. Elharari didn’t provide the ship’s IMO number, a unique numeric identifier assigned to individual merchant vessels. The ship’s cargo would be worth about $38 million at the current price for Brent crude, the benchmark for Es Sider grade. The crude loaded on the tanker belongs to the Waha Oil Co., a joint venture between the NOC, Marathon Oil Corp. (MRO), Hess Corp. (HES) and ConocoPhillips (COP), according to the state-owned company. Libya, a member of the Organization of Petroleum Exporting Countries, holds Africa’s largest oil reserves. It produced about 1.6 million barrels a day before the rebellion that ended Muammar al-Qaddafi’s four-decade rule in 2011. Source :  http://www.bloomberg.com/news/2014-03-10/tanker-lifting-libya-rebel-crude-sends-warning-shot-to-tripoli.html