Libyan oil port shut down as government tries to take over oil exports

Libya Channel

One of Libya’s only three operating oil terminals has been ordered to halt exports until further notice by the security force guarding the facility. The move is aimed at supporting the official Libyan government in its efforts to take over the oil business from rival authorities in the capital Tripoli.

 

The Petroleum Facilities Guard’s central Libyan division, which is in charge of security at oil facilities in the eastern Libyan oil crescent, on Sunday sent a letter to the managers at Zueitina oil terminal, ordering them to stop exports until further notice. In response, the Tripoli-based management of the NOC, Libya’s National Oil Corporation, on Tuesday declared force majeure for Zueitina, arguing that the “deteriorating security situation at this location” had resulted in the “total shutdown” of the oil port.

 

Zueitina terminal only resumed oil exports in October following a five-month break due to supply bottlenecks caused by workers protests among other problems. Zueitina has in fact been closed for much of the past two years as a result of a regional oil port blockade between 2013 and 2014, as well as a long-held dispute between operating company Zueitina Oil Co. and some of its employees. A tanker moored at Zueitina for two days has been prevented from loading, Bloomberg reported on Tuesday.

The closure is to be seen in the context of the political conflict between Libya’s two rival governments, the internationally recognized one that operates out of eastern Libya and the rival administration that took control in Tripoli after the capital was seized by armed coalition Libya Dawn in the summer of 2014. Both claim to be legally entitled to Libya’s oil export revenue, the country’s only major source of income, and each supports a different NOC management.

 

At the close of last year, the official government declared that the original NOC in Tripoli was no longer independent due to its location within Libya Dawn-controlled territory and opened a separate National oil Company in Tobruk, where the parliament is also based.

 

NOC officials in Tripoli maintain they are not linked to either government, and so far oil business is still conducted via the existing structures and institutions, namely the NOC and the Libyan Central Bank in Tripoli. But since the start of the year officials in eastern Libya have been trying hard to change this, setting up bank accounts in the UAE, appointing a new Central Bank management, and lobbying for international recognition.

 

The PFG’s central division, which is led by controversial Ajdabiya strongman Ibrahim Jadhran, is aligned with the official government and is now using its military position to prevent the Tripoli-based NOC from exporting oil from the oil crescent. PFG spokesman Ali al-Hassi told Libya Channel that this was to “protect Libya’s wealth” from the “illegitimate Tripoli government”, and that only exports on behalf of the official government would be allowed. According to the al-Hassi, the decision was taken in coordination with Naji al-Moghrebi, the chairman of the Tobruk-based NOC.

 

Meanwhile, Al-Moghrebi’s team is trying to launch oil exports on its own, and last week announced it would lift oil at Hariga terminal in Tobruk. Last Wednesday, NOC Marketing manager Dr. Almabruk Sultan notified NOC-subsidiary AGOCO, which runs the terminal, of a cargo of 600,000 to 1 million barrels to be lifted between November 1 to 5. On Thursday this was seconded by another letter, this time signed by Naji al-Moghrebi himself, announcing a 650,000 barrel cargo of Sarir/Messla crude to be lifted at Hariga between November 3 to 5.

 

Ibrahim Jadhran’s support for the government raises mixed feelings, as many Libyans regard him as an outlaw rather than a trustworthy ally for the authorities. Jadhran and his PFG division, in a coalition with eastern Libyan federalists, led the almost year-long oil port blockade in 2013/2014, demanding decentralization measures and accusing the government at the time of corrupt practices. Financial compensation was part of the deal between the blockade leaders and the government that ended the blockade.

 

Jadhran’s group also attempted to export oil independently back in March 2014, but US Navy Seals raided the oil tanker and returned it to Libya at the request of the then-government. In a well-timed interview with Euronews on Tuesday, Jadhran justified his past actions and elaborated on his relations with the current administration, expressing support for a future national unity government.

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