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.

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Conflict over Libya oil drastically reduces production

The Tripoli-based National Oil Corp.(NOC) said oil fields responsible for the bulk of Libyan oil production will be forced to stop production within a month unless the blockade is lifted on the port of Hariga at Tobruk, in eastern Libya.

Mohamed Harari, a spokesperson for the NOC, said: “In less than four weeks we will have to shut production completely because the tanks at Hariga will be full. The blockade will cause serious harm and bring no benefits.” The eastern part of Libya is controlled by the Tobruk-based House of Representatives (HoR) under prime minister Abdullah al-Thinni which has a rival National Oil Company based in the east. The HoR said that it would not allow any tankers to load and depart Hariga without their approval.

Previously, the HoR had tried to export oil through its own NOC rather than the Tripoli-based NOC which is recognized by oil traders and the rival Government of National Accord (GNA) as having a monopoly on oil exports. The Indian flagged Distya Ameya oil tanker sailed from Hariga near the end of April. It was blacklisted by the UN and returned to offload its cargo at a port in the west under the control of the GNA government. The Special Representative of the Secretary-General (SRSG), Martin Kobler, had condemned the attempted export. The UN had blacklisted the tanker but has now been removed from the list.

Oil output in Libya has already fallen about 80 percent since the ouster in 2011 of Muammar Gadaffi. While oil officials in eastern Libya say they have no plans to block shipments from Hariga no tankers have left the port since April 28. The tanker Seachance is moored off the port after it was prevented from exporting a million barrels of crude from Hariga.

HoR representative Abdelsalam Al-Badi had claimed that loading of oil had resumed at Hariga. Harari however refuted this claim: The spokesman of the NOC, Mohammed Al-Harari, confirmed that one of the oil officials in Al-Thanni government – Al-Mabrouk Sultan, had ordered Al-Khaleej Al-Arabi Oil Company not to load oil on a tanker related to the Tripoli-based NOC.

Exports through Hariga constitute about three quarters of present Libyan exports. Last week, the Arabian Gulf Oil Co. which ships through Hariga said production had been dropped from 240,000 barrels a day to just 90,000. Harari also noted the oil from some of the local fields is high in wax, and if oil does not keep moving through the pipelines it could solidify causing permanent production loss. NOC Tripoli-based chairman Mustafa Sanalia said: “Open the ports for the wellbeing of our country. Unity is the only solution.” Sanalia also pointed out: "The worst thing is this blockade will achieve nothing. In terms of legitimacy, which is what the blockaders want, it is a dead end." The HoR says that it plans to export more oil through its own NOC but given that their earlier attempt was unsuccessful it is not clear how any further attempts could succeed.

Rival eastern oil company in Libya tries to ship oil illegally

The Al-Thinni government of the Tobruk-based House of Representatives (HoR) is planning to export 650,000 barrels of crude that were pumped from the Messia and Sarir oil fields at Hariga port in Tobruk.

According to Omran al-Zwai of the Arabian Gulf Oil Co. tanker Distya Ameya is due to sail on April 25 to Malta. The cargo was sold to DSA Consultancy FZC, a company that is based in the United Arab Emirtates (UAE) according Nagi Elmagrabi, who heads the breakaway National Oil Company in the east. The internationally recognized National Oil Company is based in Tripoli and is cooperating with the UN-brokered Government of National Accord (GNA). International traders such as Glencore deal with it.

Three of the main oil ports in the east are guarded by the Petroleum Forces Guard led by Ibrahim Jodhran. He supports the GNA and would export through the Tripoli-based NOC. He does not control the Hariga port however. General Haftar the commander in chief of the Libyan National Army of the Al-Thinni government, no doubt wants the HoR to export oil so as to provide funds for the Al-Thinni government. Funds can be deposited in a separate branch of the Central Bank of Libya under control of the HoR. Ironically, Jodhran himself has tried to illegally ship oil by a tanker called the Morning Glory and also supported the eastern oil company before deciding to support the GNA and Tripoli NOC. He is a bitter foe of General Haftar.

A few days ago, the Tripoli NOC issued a statement on the situation saying that they had notified the Presidency Council of the GNA of the attempt by the Al-Thinni administration to illegally ship oil: Musfafa Sanalia NOC chairman said:“Agoco, our subsidiary in the east, was instructed yesterday by a Beyda official to load a ship at Marsa el-Hariga, I notified Prime Minister Serraj and the Presidency Council, who understood immediately the seriousness of the issue and took the necessary steps to stop the vessel from loading. Agoco employees and port officials understood this was a political attempt to divide the country, and I am very proud that they resisted the pressure to load this vessel. This had the potential to be a very ugly incident and I am pleased that it has been resolved peacefully without injury to anybody or loss of revenue or damage to the integrity of NOC or the country.”

Sanalia pointed out that the attempted export breached United Nations Security Council resolution 2278.

Sanalia said the NOC had been in contact with the captain of the ship and informed him that he is breaching the UN resolution. The NOC asked him to leave Libyan waters immediately. In response the captain turned off the ship's tracking system. It seems that the ship may be loaded and ready to set sail. A recent tweet says: "Chairman of NOC East confirms 1st crude oil shipment from #Tobruk's Hraiga port. distant pic of the tanker". It is quite possible that the tanker may be intercepted by the US or Italian navy.

Before the 2011 overthrow of Gadaffi, Libya pumped about 1.6 million barrels of oil a day. It now produces only 361,000 barrels a day.

The illegal export of the oil is a serious challenge to the UN and the GNA. The eastern branch of the Libyan National Bank is also planning to print its own banknotes. A recent article by Richard Galustian in the Times of Malta, suggests that Libya could be headed for a breakup between the west and the east. Significantly, Russia has refused to recognize the GNA until a vote of confidence from the HoR. There could be a conflict developing between western supporters of the GNA and supporters of Haftar and the HoR including Egypt, the UAE, the Arab League and now it seems Russia.