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Saturday, January 3, 2015

Fires being contained in oil tanks at Libya's largest export port

There have been fires at Es Sider the main oil export terminal for a week now. The fires have reportedly destroyed four days of Libya's oil production.


Conflict continues between forces of the internationally-recognized Tobruk government under prime minister Al-Thinni with the militias loyal to the Tripoli government whose prime minister is Omar al-Hassi. A fire was started when a rocket hit a storage tank at Es Sider last week during an attempt by the Tripoli forces to take the port. Each side blames the other for the rocket strike. Seven tanks are damaged and up to 1.8 million barrels of oil have been destroyed. The conflict has shut down the two ports of Es Sider and Ras Lanauf, the two largest export ports in Libya. Oil output in Libya has declined to around 380,000 barrels a day, about one fifth production levels before Gadaffi was overthrown. 
Last Monday, Business Insider reported production at the far eastern port of Hariga at just 128,000 barrels a day as the two main ports remained closed. The price of Brent crude rose briefly but there remains an oversupply putting more downward pressure on prices. The Central Bank has tried to stay out of the conflict between rival governments but neither of the two rival parliaments has agreed on a new budget. Of the seven oil tanks that were ablaze at one time, only two remain burning according to Mohamed El Harari of the NOC the state oil corporation. The Tobruk government contracted with a US company to help fight the fires. Government spokesperson Mohamed Bazaza said that the value of the contract was $6 million. The name of the company was not given. More recently Ali al-Hassi, a military spokesperson for the Tobruk government forces at Es Sider, said the US firefighters might not be needed any more. Two tanks have completely collapsed and cost to rebuild the tanks runs at around $105 million. The Es Sider terminal is run by Marathon, Hess, and ConocoPhilips in a partnership with a Libyan state-owned firm.
 UN-sponsored peace talks are scheduled for January 6 somewhere outside of LIbya. However, continued violence between government and anti-government forces may make any meaningful dialogue unlikely. The UN has recently condemned a terrorist attack on the hotel in Tobruk where the internationally-recognized Al-Thinni government meets. A suicide bomber detonated a car outside the hotel wounding at least 11. A United Nations Support Mission(UNSMIL) in Libya statement said: “This despicable act will only increase the determination of those Libyans seeking a political solution to forge ahead with their efforts to bring stability and security to Libya.”
 Al-Thinni was the prime minister of the Libyan government when CIA-linked General Khalifa Haftar's allies burned and sacked the Libyan parliament as part of his Operation Dignity. Then Al-Thinni condemned those attacks and there was an arrest warrant out for Haftar but now Haftar heads Al-Thinni's own armed forces. The Libyan Supreme Court on November 6 ruled that the June elections in Libya were unconstitutional and that the Tobruk House of Representatives should be dissolved. The Tobruk government rejected the ruling and the international community and most of the international press have ignored the decision.

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