Libya: Rebels aim to restart oil production

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, June 9 -- Forces opposed to the rule of Libya’s leader Moammar Gadhafi said they hope to restart oil production from the war-torn North African nation in an effort to increase revenues.

Rebel Oil and Finance Minister Ali Tarhouni, without specifying a timeline, said the opposition National Transitional Council (NTC) hoped to “soon” resume oil production of as much as 100,000 b/d.

Tarhouni’s remarks coincided with an announcement by US officials of the delivery of the TNC's first US oil sale, part of a broader strategy they hope will get money flowing to the cash-starved rebels.

San Antonio-based refiner Tesoro Corp. entered into an agreement on May 25 with TNC for 1.2 million bbl of Libyan oil, the Department of State said. The shipment was scheduled to arrive aboard the Liberian-flagged MT Equator tanker in Hawaii on June 8.

“We purchased a cargo of Libyan crude that was available at the time," Tesoro company spokesman Mike Marcy told OGJ, adding that the purchase was made in “strict accordance with the relevant White House Executive Order, signed by President Obama.”

The US government said in late February that it was legal for firms to do business with the rebel-controlled Arabian Gulf Oil Co. (Agoco), which produced 400,000 b/d prior to the outbreak of hostilities in Libya more than 4 months ago.

Sources close to the transaction told OGJ that Agoco sold the oil initially to Geneva-based oil trader Vitol SA which, in turn, sold it on to Tesoro. Neither Vitol nor Tesoro was in a position to comment on the remarks.

Tesoro’s announcement ended weeks of speculation over the purchaser of the 1 million bbl oil cargo that shipped from Libya’s rebel-held port of Marsa el-Hariga in eastern Libya aboard the MT Equator, a Suezmax tanker chartered by Vitol (OGJ Online, Apr. 11, 2011).

Meanwhile, Libya’s defecting labor minister Ali Al-Amin Manfur was quoted by Swiss media as saying Gadhafi’s regime is selling oil on the black market in an effort to raised badly needed cash.

“The regime controls the businesses, and the oil which it is selling on the black market, and it has access to the state treasury,” Manfur told the Geneva daily Le Temps, in an interview.

Manfur did not detail the oil sales in the interview, which appeared as Gadhafi’s forces began a new offensive against the rebel-held oil port of Misrata.

Under United Nations sanctions imposed on Libya in March following Gadhafi’s violent reaction to demonstrations against his rule, five companies—including National Oil Corp. and the central bank—were blacklisted.

There was no formal oil embargo, but the blacklisting of NOC effectively made it illegal to buy Libyan oil, apart from that produced by the rebel-held Agoco.

Contact Eric Watkins at hippalus@yahoo.com.

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