NOC Cancels Two Oil Cargoes in Dispute with East

Libya's National Oil Corporation (NOC) based in Tripoli said on Thursday it had cancelled two oil cargoes from its May export program because a rival NOC in the east is blocking exports from Marsa al-Hariga.

 

Mohamed el-Harari, spokesman for the NOC in Tripoli said in a statement that the standoff was costing Libya $10 million a day, and that revenue of $120 million had been lost so far.

 

The NOC in Benghazi, which is loyal to Libya's eastern government, tried last month to export a first cargo of oil but the tanker was blacklisted by the United Nations and forced to return, deepening the rift between the rival NOCs.

 

Eastern officials have since prevented crude being loaded onto a tanker sent to the Hariga port by the Tripoli NOC, which is working with a new U.N.-backed unity government up and running since March to try to revive oil output.

 

Because of the dispute, Libya's oil production has dropped to just over 200,000 barrels per day (bpd), a fraction of the 1.6 million bpd it produced before the uprising that toppled Muammar Gaddafi in 2011.

 

The Tripoli NOC has warned that production could sink further this month if no oil is exported from Hariga and storage tanks there fill up.

 

It says exports from the port account for three quarters of Libya's oil output and that Libya's national income, which has already been slashed by falling production and prices, will be halved if shipments from Hariga stop.

 

"Imports or subsidies or perhaps both will have to be cut," said Harari. "Then, shortages of fuel, electricity, food, medicines and mobile networks coverage that people have been complaining about will really begin to bite."

 

Harari said the tanker sent by Glencore (GLCNF) to load oil for the NOC in Tripoli, Seachance, was still waiting off Hariga.

 

The dispute over oil exports is part of a wider power struggle between Libyan factions.

 

The NOC in Benghazi claims that a 2013 resolution moved the corporation's national headquarters to the eastern city. It is backed by a government that has been based in eastern Libya since 2014, when rivals took over the capital Tripoli and installed a parallel administration.

 

However, attempts by the eastern NOC to sell oil independently have been unsuccessful. The NOC in Tripoli has continued to manage production and has retained international backing throughout Libya's crisis.


(Writing by Aidan Lewis; editing by David Clarke)