Libya: Tanker arrives to upload oil from rebel-controlled port

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Apr. 5 -- The MT Equator, a Suezmax tanker chartered by Geneva-based oil trader Vitol SA, arrived in the rebel-held port of Marsa el-Hariga in eastern Libya, aiming to take on up to 1 million bbl of oil for export.

"The significance is not only that this is the first shipment in 18 days, but also a signal that Libya is open to international trade and shipping," said Michelle Wiese Bockmann, markets editor of Lloyd’s List shipping newspaper.

More to the point, a delivery from Marsa el-Hariga would bring in significant funds for forces opposed to the rule of Libyan leader Moammar Gadhafi even as government forces today continued to attack rebels trying to reassert their control of the key oil town of Brega.

The battle over Brega is largely connected with the town’s 8,000-b/d refinery and its Mediterranean oil export terminal—both facilities that could significantly boost the rebels’ chances of increased revenue in their fight against Gadhafi’s better trained and equipped military forces.

The planned shipment aboard the MT Equator would represent just a fraction of Libya's precrisis exports of 1.6 million b/d, but analyst Samuel Ciszuk of IHS Global Insight said the exports would make rebel operations and long-term existence “much more viable.”

In a note to clients, however, Ciszuk also warned about the likelihood of fighting spreading to the eastern oil areas.

"Given the impact on the rebel movement that the establishment of its own independent revenue stream would have, it is not surprising that the fighting could be draw into the rebel-controlled eastern oil areas," Ciszuk said.

The rebels would likely "struggle to successfully repel well-organized raids to damage production and transport infrastructure at the oilfields," Ciszuk said.

Ciszuk’s remarks followed a visit to Benghazi, eastern Libya, by Eni SPA Chief Executive Officer Paolo Scaroni on Apr. 2, according to a statement by Italy’s Foreign Minister Franco Frattini.

According to Frattini, Scaroni “had contacts with the Libyan National Transitional Council to restart cooperation in the energy sector and get going again the collaboration with Italy in the oil sector.”

Before Libya's violent upheaval largely shut down or drastically reduced oil and gas production, Eni was the biggest gas exporter from Libya, as well as its largest oil producer. Its operations are largely in the rebel-held areas of eastern Libya.

Meanwhile, Abdul Ilah al-Khatib, the United Nations’ special envoy to Libya, following earlier meetings with opposition leaders, told the UN Security Council that the rebels have “raised concerns about the lack of funds, as well as issues relating to the marketing and sale of oil and gas in Libya.”

Al-Khatib told the council that said loan guarantees on oil and gas and funds from overseas assets were crucial to sustain the rebel’s economic stability.

The European Union offered its assurances over the potential sale of oil by the rebels, saying that its embargo on Libyan oil and gas exports only targets the Gadhafi regime.

The 27-nation bloc has “no issue” with commercial dealings in Libyan gas and oil as long as the revenue doesn’t reach Gadhafi or his supporters, according to Michael Mann, spokesman for EU foreign policy chief Catherine Ashton.

Exactly who will buy the oil or even its destination are uncertain as a spokesman for Vitol declined to comment on the company's involvement in the shipment aboard the MT Equator, citing commercial sensitivity.

According to Bockmann, the shipment would be taken to Qatar for marketing possibly to Italy and France. But Vitol could also have the cargo delivered to Antwerp or Fujairah, where it owns facilities with around 147,000 b/d of refining capacity.

The rebel-controlled Arabian Gulf Oil Co. (AGOC) said it has 3 million bbl of crude stored at Marsa el-Hariga and that opposition-controlled fields in the eastern part of the Sirte basin—connected to the port via pipeline—are producing at a rate of 100,000-120,000 b/d.

But Ciszuk dismissed as “very over-optimistic” reports from AGOC that production from the Sirte basin could quickly be increased via the recruitment of Arab oil engineers, mainly Egyptians, to make up for a shortage of Libyans.

Meanwhile, a Libyan-owned vessel carrying a cargo of imported gasoline is reported to have docked at a government-controlled port, helping to relieve a fuel shortage.

A Libyan government official and an energy industry executive said the ship is owned by the Libyan state shipping company and was unloading a cargo of 23 million l. of fuel at the port of Zawiyah, 50 km west of Tripoli.

It was not clear where the vessel had come from or how it was able to penetrate the cordon of North Atlantic Treaty Organization warships now patrolling Libya’s coast to help enforce international sanctions.

The Libyan energy industry executive said the arrival of the vessel was a good step in easing the shortages in government-controlled areas of the country, but that future supplies remained uncertain.

“We do not know if there is a plan to bring more fuel, or if it is only this ship,” he said.

Contact Eric Watkins at hippalus@yahoo.com.

Related Articles

Inhofe, Lankford say new BIA rules threaten Osage oil operations

07/10/2015 New US Bureau of Indian Affairs regulations that increase production expenses on tribal lands could put the Osage Nation out of business, Oklahoma’...

House panel’s crude export ban hearing weighs urgency against caution

07/10/2015 A US House Energy and Commerce subcommittee hearing on legislation to repeal the ban on exporting US-produced crude oil quickly broke along party l...

Chevron Phillips Chemical makes executive appointments

07/10/2015

Chevron Phillips Chemical Co. LLC has made several executive appointments, all effective Aug. 1.

Twelve workers killed in Nigeria pipeline explosion

07/10/2015 Eni SPA reported that an explosion occurred July 9 at the repair site for the Tebidaba-Clough Creek oil pipeline in Nigeria’s onshore Niger Delta.

Gov. Tomblin forms West Virginia oil, gas safety commission

07/10/2015 West Virginia Gov. Earl Ray Tomblin (D) established the oil and gas safety commission he announced in his 2015 State of the State address. The grou...

MARKET WATCH: NYMEX, Brent crude oil prices rebound more than $1/bbl

07/10/2015 Prices for US light, sweet crude oil and Brent crude each rebounded by more than $1/bbl on their respective markets July 9, and analysts attributed...

Transco seeks FERC approval for New York Bay Expansion project

07/09/2015 Transcontinental Gas Pipe Line Co. LLC (Transco), a wholly owned subsidiary of Williams Partners LP, has filed an application with the US Federal E...

House Oversight panel subpoenas Kerry for Keystone XL documents

07/09/2015 The US House Oversight and Government Reform Committee issued a subpoena to US Sec. of State John F. Kerry for reports, recommendations, letters, a...

MARKET WATCH: NYMEX crude oil prices drop for fifth consecutive trading session

07/09/2015 US light, sweet crude oil prices settled slightly lower on the New York market July 8 for the fifth consecutive trading session, and analysts attri...
White Papers

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by

Squeezing the Green: How to Cut Petroleum Downstream Costs and Optimize Processing Efficiencies with Enterprise Project Portfolio Management Solutions

As the downstream petroleum industry grapples with change in every sector and at every level, includin...
Sponsored by

7 Steps to Improve Oil & Gas Asset Decommissioning

Global competition and volatile markets are creating a challenging business climate for project based ...
Sponsored by
Available Webcasts

On Demand

OGJ's Midyear Forecast 2015

Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Predictive Analytics in your digital oilfield - Optimize Production Yield and Reduce Operational Costs

Tue, Jul 7, 2015

Putting predictive analytics to work in your oilfield can help you anticipate failures, plan and schedule work in advance, eliminate emergency work and catastrophic failures, and at the same time you can optimize working capital and improve resource utilization.  When you apply analytic capabilities to critical production assets it is possible to reduce non-productive time and increase your yield.

Learn how IBM's analytics capabilities can be applied to critical production assets with the goal of reducing non-productive time, increasing yield and reducing operations costs.

register:WEBCAST


Cognitive Solutions for Upstream Oil and Gas

Fri, Jun 12, 2015

The oil & gas sector is under pressure on all sides. Reserves are limited and it’s becoming increasingly expensive to find and extract new resources. Margins are already being squeezed in an industry where one wrong decision can cost millions. Analyzing data used in energy exploration can save millions of dollars as we develop ways to predict where and how to extract the world’s massive energy reserves.

This session with IBM Subject Matter Experts will discuss how IBM Cognitive Solutions contribute to the oil and gas industry using predictive analytics and cognitive computing, as well as real time streaming for exploration and drilling.

register:WEBCAST


The Alternative Fuel Movement: Four Need-to-Know Excise Tax Complexities

Thu, Jun 4, 2015

Discussion on how to approach, and ultimately embrace, the alternative fuel market by pulling back the veil on excise tax complexities. Taxes may be an aggravating part of daily operations, but their accuracy is crucial in your path towards business success.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected