Libya’s Ports Prepare To Load Oil Tankers After Deal – UPDATE

The Morning Glory tanker loaded with rebel crude docked at the Es Sider export terminal in Ras Lanuf March 8, 2014. REUTERS/Esam Omran Al-Fetori
The Morning Glory tanker loaded with rebel crude docked at the Es Sider export terminal in Ras Lanuf March 8, 2014 in an attempt to smuggle oil out of Libya. REUTERS/Esam Omran Al-Fetori

Reuters

By Ahmed Elumami

TRIPOLI, April 7 (Reuters) – Libya’s Zueitina oil port prepared on Monday to load crude on tankers after the government reached a deal with rebels to reopen four terminals that insurgents have occupied since summer.

The federalist rebels agreed on Sunday to end gradually their eight-month blockade of Zueitina, Hariga, Ras Lanuf and Es Sider ports, which account for around 700,000 barrels per day of the OPEC country’s crude exports.

Brent crude fell $1.47 to a low of $105.25 per barrel before recovering to $105.72 by 1256 GMT, after news of an end to the port protest removed some of the supply worries affecting the oil market.

“The port is ready to start exporting at the present time or later at any time, and a maintenance unit team has already started work to receive the first tanker,” said Abdulatif Al-Alam, operation coordinator at Zueitina.

He said the port was awaiting orders from the state-run National Oil Corp to begin receiving customers.

Under the agreement with Tripoli’s government, Zueitina and Hariga ports were expected to open immediately while the larger ports, Ras Lanuf and Es Sider with around 500,000 bpd capacity, will be reopened in two to four weeks after more negotiations.

But the manager at Hariga said he had received no confirmation to reopen and would need at least 10 days to prepare for tankers to load crude.

The remarks from the Hariga manager indicated how technical problems and ongoing negotiations over the two larger ports could still delay a full reopening of the North African state’s oil supplies.

“It takes 10 days or two weeks at least to prepare the oil port to work again and to welcome customers and tankers to load oil,” Hariga terminal manager Rajab Abdulrasoul told Reuters.

The deal to end the port standoff will be a major boost for Libya’s fragile government, which has struggled to impose its authority over a vast nation still in chaos nearly three years after the fall of dictator Muammar Gaddafi.

Still, the agreement did not address rebels’ key political demands for more autonomy or sharing of oil revenues. Details were not clear about what remains to be negotiated over the two larger terminals.

TOUGH NEGOTIATIONS

The clash over control of Libya’s oil resources was the starkest example yet of how far the government is unable to impose its authority over brigades of former rebels and militias who refused to disarm after Gaddafi’s fall and often use their muscle to strong-arm the state.

The federalist rebel leader, Ibrahim Jathran, is a former anti-Gaddafi fighter who took command of facility guards protecting oilfields, refineries and ports. He defected with thousands of his men in the summer to seize three terminals.

Hariga had been taken over by a separate group of protesters who sympathized with Jathran’s campaign for a larger slice of Libya’s oil wealth for his eastern region, where many feel they have been abandoned by Tripoli for years.

The agreement calls for a commission to investigate corruption, for charges against Jathran’s men to be dropped and for the former oil guards to receive their state salaries.

Tripoli’s government often finds itself falling prey to rival bands of former rebels and militias who are loosely allied with competing political factions in the country’s parliament. (writing by Patrick Markey; Editing by Erica Billingham and Dale Hudson)

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