Bloomberg News

Libya Navy Impounds Tanker Seeking to Export From Rebel Port

March 10, 2014

Libya’s navy impounded a tanker that was seeking to export crude from a rebel-held port, according to the national oil company, as the government battles to reassert control over its main source of revenue.

The tanker was taken from Es Sider, Libya’s biggest export terminal, to a port under government control, Mohamed Elharari, a spokesman for the National Oil Corp., said in a phone interview. The destination is Qasr Ahmed port in Misrata in western Libya, the official Lana news agency said.

Rebels seeking autonomy for eastern Libya have seized control of key export sites in July last year, causing oil production to plunge. It’s one of several internal conflicts that have destabilized the North African nation since the overthrow of Muammar Qaddafi in 2011.

The ship had arrived in Es Sider on March 8 after Libyan armed forces refused government orders to fire on it, Prime Minister Ali Zaidan said in Tripoli, the capital. Air force officers told Zaidan they didn’t want to risk harming civilians or cause an oil spill, the Libya Herald newspaper reported.

Libya’s inability to restore oil exports from its eastern terminals was among the reasons cited by Citigroup Inc. when it raised its 2014 forecast for Brent crude to $103 a barrel from $93 a barrel on Feb. 25. The country is pumping about 275,000 barrels a day compared with 1.4 million barrels a day last July.

The head of Libya’s General National Congress ordered the creation of a military force to “liberate the oil ports” within a week, congress spokesman Omar Homaidan said today, according to Lana.

U.S. Concern

The U.S. State Department said it was “deeply concerned” that the tanker was loading crude at Es Sider without the authorization of a U.S.-Libyan joint venture that produced it. Any buyers of this oil would incur penalties, the State Department said in a statement yesterday.

Brent futures trading on the London-based ICE Futures Europe exchange fell 0.9 percent to $107.97 a barrel at 4:49 p.m. local time.

The self-declared authorities in eastern Libya are demanding that Barqa, the local name for the region that usually produces more than half of the country’s oil, receive 15 percent of national crude revenue. Zaidan says he can’t commit to an agreement before the adoption of a new constitution.

Ship’s Owner

Elharari identified the ship yesterday as the North Korea-flagged Morning Glory, with a capacity of 350,000 barrels. It changed name from the Gulf Glory on Feb. 27 and also started flying the Asian country’s flag on that date too, having previously flown the flag of Liberia, he said. There is another tanker with the name Morning Glory that is unrelated to the one off Libya’s coast.

The registered owner of the Gulf Glory is Sea Pride Shipping Inc. in Sharjah in the United Arab Emirates, according to a European Commission database.

“Sea Pride Shipping can confirm it is the registered owner of the vessel Gulf Glory but is currently in dispute with the vessels operators,” Sea Pride said in a statement distributed by MTI Network, an external communications company. “Sea Pride Shipping currently has no operational control over the vessel, including where she operates and what cargo she may be carrying.”

The ship’s cargo would be valued at about $38 million at the current price for Brent crude, the benchmark for Es Sider grade. The crude loaded on the tanker belongs to the Waha Oil Co., a joint venture between the NOC, Marathon Oil Corp. (MRO:US), Hess Corp. (HES:US) and ConocoPhillips (COP:US), according to the state-owned company.

Libya, a member of the Organization of Petroleum Exporting Countries, holds Africa’s largest oil reserves. It produced about 1.6 million barrels a day before the rebellion that ended Muammar al-Qaddafi’s four-decade rule in 2011.

To contact the reporter on this story: Maher Chmaytelli in Dubai at mchmaytelli@bloomberg.net

To contact the editors responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net Ben Holland, Francis Harris


Best LBO Ever
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • MRO
    (Marathon Oil Corp)
    • $40.4 USD
    • 0.57
    • 1.41%
  • HES
    (Hess Corp)
    • $99.67 USD
    • 1.70
    • 1.71%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus