Libya: Opposition plans first oil exports this week

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Apr. 4 -- Forces opposed to the rule of Libya’s leader Moammar Gadhafi are poised to begin exports of crude this week, with a Liberia-flagged tanker expected to berth at Tobruk’s export terminal soon.

Lloyd’s Intelligence, a shipping industry data provider, said the MT Equator was off Port Said, Egypt, this morning and that the vessel is expected to dock at Tobruk’s Marsa el-Hariga oil export terminal on Apr. 5.

A spokesman for Dynacom Tankers Management Ltd., which operates the MT Equator, declined to confirm the reports. “We don't have such information,” he said. “It might arrive in the next days, but it's not something we can say now.”

News of the ship’s pending arrival follows earlier reports that the rebel movement plans to begin selling the country’s oil under an agreement—yet to be confirmed—with state-owned Qatar Petroleum.

“The Qatar government agreed, the agreement is signed, that they will market crude oil for us,” said Ali al-Tarhoni, a senior member of the Transitional National Council who is in charge of oil and finance.

Tarhouni said under a barter agreement aimed at bypassing international sanctions, Qatar would market the crude and would then use the proceeds to purchase humanitarian supplies for the rebels.

Diplomats have made clear that opposition oil sales would not be subject to the sanctions imposed on Gadhafi’s government. But US Treasury officials last week said the rebels would have to create a payment mechanism that did not involve Libya’s National Oil Corp. or any other government institution.

Tarhouni said the oil will come from the Sarir oil field in the country's remote southeast, and that rebel forces would be able to export 1 million bbl/week once they acquired the vessels to transport it.

Tarhouni said, “The only delay is finding the vessels.”

Oil traders and tanker shipbrokers said they did not know who had chartered the 2006-built MT Equator, which can carry up to 1 million bbl of oil or about one third the amount now said to be stored at Marsa el-Hariga export terminal, which is linked by a pipeline to the Sarir oil field.

Officials at the rebel-controlled Arabian Gulf Oil Co last week said the firm was producing 100,000 b/d, down from the usual 400,000 b/d, with part of the reduced output used at refineries in Tubruq and Sarir to supply rebel forces.

Although Sarir field is said to be in rebel hands, Samuel Ciszuk, senior Middle East energy analyst at IHS Global Insight, said forces loyal to Gadhafi would be likely to attack the pipeline connecting it with the export terminal at Tobruk in an effort to thwart the rebels’ export plans.

“Given the organizational, logistical, and firepower superiority on the battlefield of the regime’s forces, it would be highly surprising if they did not move in to try to disrupt oil flows to Marsa El-Harigh perhaps by striking at the long pipeline connecting the Sirte basin to the port,” Ciszuk said.

News of the planned oil exports coincided with gains made by the rebels against Gadhafi’s forces over the weekend, especially their recapture of parts of Brega, another main oil hub on the country’s Mediterranean coast.

“New Brega is under control of our forces and we are mopping up around the university," said Lt. Muftah Omar Hamza, referring to a residential section of the coastal town. West Brega, which includes a refinery and housing for oil workers, is still a battleground between the two sides.

However, rebel forces expressed optimism that they would soon take control of the entire town. "We're advancing. By today we'll have full control of Brega," said one rebel fighter. "We're more organized now, and that's played a big role."

Meanwhile, Italy today recognized the rebel-led Libyan National Transitional Council (NTC) as the country's only legitimate voice, becoming the third nation to do so after France and Qatar.

After speaking with NTC foreign envoy Ali al-Essawi, Italian Foreign Minister Franco Frattini said the only way to resolve the conflict is for Gadhafi and his sons to leave Libya.

"They are leaders of the military operations against Libyans," Al-Essawi said, adding that proposals by a Libyan government envoy Abdul-Ati al-Obeidi, who met with Greek officials on Apr. 3, were “not credible” as they lacked any reference to the departure of Gadhafi.

Britain’s Foreign Sec. William Hague today told the UK parliament that the first meeting of the international contact group on Libya will take place next week in the Qatari capital Doha.

The contact group was established at a conference on Libya attended by 40 countries and institutions, with all participants seeking an endgame aimed at halting the Libyan leader’s attacks on his own people.

“The world is united in believing that the Gadhafi regime has lost all legitimacy and that he must go, allowing the Libyan people to determine their own future,” Hague said.

Contact Eric Watkins at hippalus@yahoo.com.

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