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Libyan rebels to resume oil exports through tanker

05 April 2011 19:41 (UTC +04:00)

Baku-APA. A tanker arrived in Libya’s rebel-held port of Marsa el-Hariga on Tuesday to load up a shipment of oil for export, potentially giving opponents of Moammar Gadhafi crucial funding amid escalating violence, APA reports referring news.yahoo.com website.
The Equator tanker, which can carry 1 million barrels of oil, was chartered by Geneva-based oil trader Vitol SA, according to London-based shipping data provider Lloyd’s Intelligence and a person with knowledge of the vessel’s movements.
The shipment would be only a tiny fraction of Libya’s pre-crisis exports of around 1.6 million barrels a day, but is viewed by analysts as a symbolic step forward.
"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, Lloyd’s List markets editor.
The conflict in Libya caused crude exports from the country, 17th among the world oil producers, to dwindle to a trickle, sparking a surge in global oil prices. Benchmark crude was trading at around $108 a barrel on Tuesday.
A delivery from Marsa el-Hariga would bring in significant funds for rebels as Libyan government forces attacked rebels trying to take back the key oil town of Brega on Tuesday.
Samuel Ciszuk, IHS Global Insight’s senior Middle East energy analyst, said that while exports are likely to remain too small to make any global difference for now, they will provide the rebels with their own independent revenue stream, "making their operations and long-term existence much more viable."
The type of delivery the tanker will take would typically be paid after loading, though it was unclear that was the case for Tuesday’s shipment.
The destination of the tanker, a Suezmax owned by Athens-based Dynacom Tankers, also remained speculative.
Patrick Handley, a London-based spokesman for Vitol, declined to comment on the company’s involvement in the shipment, citing commercial sensitivity.
Bockmann said Lloyd’s believed the shipment would be taken to Qatar for marketing â€” possibly to Italy and France. Qatar last week offered to market oil from the port, while the CEO of energy company Eni has visited the rebels’ de facto capital, Benghazi, with the aim of resuming oil ties.
Vitol, meanwhile, also has its own demands, with around 147,000 barrels per day refining capacity in Antwerp and Fujarah, in the United Arab Emirates.
The rebel-controlled Arabian Gulf Oil Co., or Agoco, said a month ago that it expected a tanker at Marsa el-Hariga, near the city of Tobruk, in mid-April.
Agoco has said it has around 3 million barrels of usable oil stored at the port and that opposition-controlled fields in the eastern part of the Sirte Basin â€” connected to the port via pipeline â€” are producing at a rate of 100,000-120,000 barrels per day. That’s down from 400,000 barrels per day before the crisis.
However, Ciszuk 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 drawn into the rebel-controlled eastern oil areas," he said in a note to clients.
The rebels would likely "struggle to successfully repel well-organised raids to damage production and transport infrastructure at the oilfields," he added.
Ciszuk also dismissed reports from Agoco 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, as "very over-optimistic."