After agreement oil exports from eastern port of Hariga resume

The Seachance, a tanker that had been blocked from loading oil for three weeks, is now loading 600,000 barrels of oil for shipment to the UK, both port and oil officials said.

Exports from Hariga were blocked earlier this month as the result of a dispute between the eastern and western-based rival National Oil Companies (NOC). The two heads of the rival NOCs met in Vienna and reached an agreement in principle to resume shipments. Earlier, at the end of April, the eastern branch had loaded the Indian-flagged Distya Ameya with oil that was not exported through the Tripoli-based NOC that is recognized by international trades and governments as the sole legitimate exporter of Libyan oil. The tanker was blacklisted by the UN and eventually returned from near Malta, where it could not land, to a western Libyan port under control of the Government of National Accord (GNA) with which the Tripoli-based company cooperates. Blocking the Seachance from loading was probably a response to the actions taken against the Ameya. The Seachance is a Maltese-flagged tanker and the oil it is to load was sold to Glencore for export to the UK.

The dispute is a lose-lose situation for both sides. Neither party is receiving any revenue from the export of oil and the dispute resulted in lower production because of lack of storage facilities at Hariga. The total production in Libya now is about 200,000 barrels a day compared to production of 1.6 million barrels per day before Gadaffi was toppled in 2011. Details of what exactly was decided have not been released. Reuters also reported that Brega port loaded a tanker with 600,000 barrels of oil for shipment to Italy.

AL-Khaleej Al-Arabi Oil Company, that is in charge of Al-Hariga port and nearby oil fields, claimed that more funds were needed to buy maintenance equipment, and pump and power generating stations. The budgeting process needed to be quicker. An official in the Tripoli-based NOC said the two rival parties agreed on resuming exports from AL-Hariga to maintain operating condition of the pipelines and to avoid a looming cash crisis.

.Nagi Emagrabi, the chair of the eastern-based NOC said: "We agreed to keep the National Oil Company neutral away from political conflicts. " Up until the creation of the Government of National Accord (GNA), the NOC had exported both from the Tripoli-based Salvation General National Congress (GNC) controlled-areas and those under control of the HoR. The revenues were divided. With the GNA now recognized as the sole legitimate Libyan government no revenues would go to the HoR. The agreement comes as the recent statement coming out of VIenna warned officials of the GNA , governments, and companies only to deal with officials of the GNA and not "parallel" but unrecognized institutions. Fortunately, officials of the Tripoli-based NOC paid no attention to this directive with the positive result that Libya will be able to export more oil.

Read more: http://www.digitaljournal.com/news/world/oil-shipments-resume-from-libyan-port-of-hariga-after-agreement/article/465787#ixzz49QfJCnir

International oil traders support neutral Libyan National Oil Co.

In spite of threats from the internationally-recognized House of Representative(HoR) in eastern Libya, the Libyan National Oil Corp. based in Tripoli continues to be supported by key international traders such as Glencore, Vitol, and Litasco.

In spite of repeated warnings from the UN and even the threat of sanctions, the HoR set up its own National Oil Corp. in the east and has been repeatedly demanding any international deals be signed with it rather than the neutral National Oil Company based in Tripoli, which has always had a monopoly on oil exports. It deposits revenues in the Libyan Central Bank which then pays salaries for the two rival governments the HoR and the General National Congress(GNC) based in Tripoli.

The HoR has even shut down the Zueitina terminal until tankers register with the eastern NOC and claims a huge deal with the Swiss company Glencore with the neutral NOC is not worth the paper it is printed on, since it was not done through their own NOC in the east.

The CEO of Glencore, Alex Beard, defended his signing of a deal with the neutral NOC, saying the international community fully support the position of the neutral NOC based in Tripoli that it should have the monopoly over contracts in spite of the threats of the HoR to block its tankers. Beard said: “They have made it very clear there is no alternative to the NOC at its legal address in Tripoli as the only recognized marketer of Libyan oil.”

Vitol a huge Swiss-based trading company is working on a supply contract with the NOC that would guarantee delivery of fuel and heavy oil needed to supply all Libyan power plants and hospitals. Ian Taylor, CEO of Vitol said:"The U.N. Security Council recently said it was important for NOC to continue to function for the benefit of all Libyans. The key word there is 'continue'. NOC, based at its legal address in Tripoli, has served Libya well by staying independent. We are confident it will continue to do so."

The chair of the NOC, Mustafa Sanalla, said the company could serve as a model for national unity and claimed Libya is at a critical juncture with attempts by the UN to broker a Libya Political Agreement and a unity Government of National Accord. However, up to now, neither competing government has approved the UN draft as it is. The new UN head of the support mission, Martin Kobler, refuses to amend the draft. Sanalla said a peace could be built around state institutions such as the NOC and Libya National Bank and that they must be kept intact. However, the HoR has tried not only to undercut the operations of the neutral NOC but also the Libyan Central Bank by appointing a rival chair and trying to set up its own branches in the east, independent of the neutral bank.

Litasco, the trading unit of Russia's Lukoil, said also that there is "no alternative" to NOC as a counterpart to any trade deals it makes with Libya. A political agreement and a unity government would go a long way to solve many of the difficulties companies now face in their dealings with Libya but for now dealing with the NOC alone would seem the sensible course of action for the international trading community. At present, global traders appear to be working to strengthen Libyan unity rather than attempting to profit by exploiting the rivalry between the two governments.

Internationally-recognized HoR Libyan government may try to sabotage Glencore oil deal

Before the rebellion against Gadaffi, Libya was pumping 1.6 million barrels of oil a day. Now, it is pumping about one quarter of that amount with new problems constantly popping up.

+ Add Image

The National Oil Company and the Libyan Central Bank have been key institutions in retaining whatever unity there is in Libya. The National Oil Company deposits the money it receives for oil exports in the Libyan Central Bank and then distributes the funds to pay salaries and expenses for both rival governments. The internationally-recognized government the House of Representatives(HoR) is located in Tobruk while the rival government the General National Congress(GNC) is located in Tripoli. The UN Support MIssion in Libya(UNSMIL) has warned the rival governments several times not to endanger the neutrality of these key institutions and threatened possible sanctions against those who do so:In this regard, UNSMIL calls on the parties to safeguard the national institutions by refraining from taking any steps that could compromise the neutrality of these institutions that are crucial for Libya’s economic survival.

The internationally-recognized HoR government went ahead and set up its own National Oil Company(NOC) in competition with the existing neutral National Oil Company located in the capital, Tripoli, and also set up a rival head of the Libyan National Bank. So far oil companies and tankers have insisted on registering only with the National Oil Company in Tripoli. This annoys the HoR, which has been attempting to force companies to register with its own NOC in the east. Recently, militia guarding a port in the east refused to load an oil tanker and closed the port to any tankers not registered with the eastern NOC.

The UN did nothing before to stop the actions of the HoR and it is doing nothing now. It is not even mentioning the actions any more. The Glencore situation is simply a continuation of the HoR drive to sabotage the operations of the neutral NOC, since it wants eastern exports to go only through its own rival firm. This threatens the economy as well as the success of negotiations for a unity Government of National Accord that the new UN Special Envoy to Libya, Martin Kobler, has been pressing for. Yet the UN not only does not attempt to stop what is going on but does not even mention it, nor does the international community.

News reports on what is happening obscure the reality that I just described. Here is a very misleading account of what happened, coming from a no less reputable news source than the Guardian which says of Glencore:The Switzerland-based firm agreed last week to buy up to half of Libya’s oil exports from the western division of the National Oil Company in Tripoli, where an Islamist-backed government is based.There are no eastern and western divisions of the National Oil Company. There is the neutral National Oil Company based in Tripoli that serves all of Libya, or is supposed to. There is also the rival NOC in the east, set up by the HoR against the wishes of the UN and in spite of the threat of sanctions. The HoR wants to keep oil revenues from ports it controls to itself and sign the contracts. Glencore would be loading crude oil from the Sarir and Messia fields and exporting from Marsa el-Hariga port in the east at Tobruk. The Guardian reports: " The eastern government says it does not recognise any agreement signed with Tripoli." However, the deal is not signed "with Tripoli" but with the National Oil Company that serves the whole of Libya, or did until the HoR attempted to sabotage the arrangement.

Other reports also repeat the Guardian misrepresentation:The eastern Libyan government's half of state-owned oil company NOC may seek to physically prevent tankers of commodity company Glencore from loading oil purchased from the western half of the company.There are not two halves of NOC, one in the east and one in the west. This is bizarre reporting.

[url=http://ww4report.com/node/14475http://ww4report.com/node/14475 t=_blank]The agreement signed in September covers 150,000 barrels a day with an option to renew the deal in December. The HoR is again snubbing its nose at the UN and the international community which has always dealt with the neutral NOC. The HoR is now forcing the business community to deal with its own rival company that was set up in spite of warnings from the UN not to do so as it will divide the country even further. If this move is successful the division between the rival governments will be increased while the UN Special Envoy to Libya is busy flogging the dead horse of the Libya Political Agreement that neither government has approved.