21-05-2016

Libyan Oil Exports to Flow Again from Disputed Terminal

oili

Libyan oil exports will flow again from a terminal that had been a subject of dispute between the groups vying for control of the country, raising new hope for the nation’s petroleum production.

Libya’s state-run National Oil Co. issued a news release on Friday saying a 660,000 barrel cargo had sailed from the port of Marsa al-Hariga, which is controlled by groups in the country’s east. The groups had closed the port 17 days ago in retaliation for successful efforts by the United Nations and an internationally backed unity government in Tripoli to block their attempts to export their own oil.

Libya became divided in the chaos that emerged from the 2011 ouster and death of dictator Moammar Gadhafi. A U.N.-backed peace effort resulted in a new unity government being installed in Tripoli, but the east has yet to recognize it and instead has tried to develop its own stream of revenue by exporting oil via its own oil company.

Under Libyan law, enforced by the U.N., Libyan oil must be shipped via the country’s official National Oil Co., which is based in the western capital of Tripoli.

The blockade added to oil disruptions in Canada and Nigeria that have pushed oil prices close to $50 a barrel—a seven-month high. They also put further pressure on Libya’s oil production, which has collapsed to less than a quarter of its capacity of 1.5 million barrels a day.

The resumption of exports came after the traditional National Oil Co. in Tripoli and the new oil company in the east came to an agreement to lift the blockade. The two sides signed a memorandum of understanding asking the parliament for groups in the east and a Presidency Council set up to reconcile rival factions “to unify the oil sector,” the news release said.

Source: Wall Street Journal

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