Libya oil exports to resume 'immediately'

[TRIPOLI] Libya's oil company on Thursday announced an "immediate" resumption of oil exports from two of the key ports captured this week by forces opposed to the country's UN-backed unity government.

The United States, for its part, insisted that oil revenues are deposited with the central bank in Tripoli.

Forces led by a controversial general, Khalifa Haftar, who backs a rival administration in eastern Libya, seized four ports in the country's so-called "oil crescent" this week and handed them over to the National Oil Company (NOC).

Their capture was a blow to the Tripoli-based Government of National Accord (GNA), which relies on oil revenues and has struggled to assert its control over the country.

The seizure of Zuwaytina, Brega, Ras Lanuf and Al-Sidra oil terminals was the latest escalation of the turmoil that has gripped Libya since the 2011 revolution which overthrew longtime dictator Moamer Kadhafi.

"Exports will resume immediately from Zuwaytina and Ras Lanuf, and will continue at Brega," NOC chairman Mustafa Sanalla said. "Exports will resume from Al-Sidra as soon as possible." Since the capture of the terminals, Sanalla has vowed to oil double production from Libya, which with an estimated 48 billion barrels holds Africa's largest oil reserves.

The US special envoy for Libya, Jonathan Winer, in a telephone interview from Washington, told AFP no action would be taken against oil exports if the proceeds are paid into Libya's central bank.

"The oil that is exported has to be exported according to lawful contracts with the proceeds going into the central bank of Libya whose main offices are in Tripoli," he said.

"If oil were to be diverted... the US will seek to enforce UN Security Council resolutions.

"If the government of Libya (GNA) asks for support again, the international community is likely to provide that support," the US envoy said.

"However, if the oil is going in the government's revenues and the government supports that, there is no action for the international community to take."

The prospects of a resumption of Libyan oil exports has fanned concern on the international oil market about a global supply glut and overproduction that have hammered prices for more than two years.

Oil prices rebounded slightly on Thursday after tanking the previous day, although gains were capped by US stockpiles data as well as the prospect of rising output in Libya and Nigeria, dealers said.

The NOC considers itself loyal to the GNA, but also to the country's internationally recognised parliament, which supports Haftar's forces and has refused to grant the GNA a vote of confidence.

Libya has only managed to export a few tankers of crude in recent months, with efforts to revive the industry thwarted by jihadist attacks and political turmoil.

"We can raise production to 600,000 barrels per day within four weeks and to 950,000 bpd by the end of the year from around 290,000 bpd at present," the NOC chief said.

However, this would depend on "receiving essential funds from the budget and on the oil crescent ports and the closed pipelines in the southwest being opened and kept open".

Libya has been wracked by turmoil, with rival administrations and militias vying for control over the past five years.

Under a UN-brokered accord signed in December, the GNA started work in the capital earlier this year but has since struggled to assert its authority.

And by capturing the oil ports, Haftar has consolidated his position.

"Haftar now has the upper hand," said Mattia Toaldo, a Libya expert with the European Council on Foreign Relations.

Haftar, 73, who sees himself as Libya's saviour after driving jihadists out of most of the country's second city, Benghazi, is the most powerful backer of the eastern administration.

Parliament head Aguila Saleh on Wednesday promoted Haftar from the rank of general to field marshal.

The offensive in the oil region came as pro-GNA forces backed by US air strikes pressed a months-long campaign to expel the last Islamic State group jihadists from the coastal city of Sirte, their former North African bastion.

AFP