Libya's PM warns may sink oil tankers nearing east ports

Ali Zeidan also announced his readiness to resign from his post, sources told Al Arabiya News Channel.

Πηγή: Reuters
By Ulf Laessing and Ghaith Shennib
Jan 8 2014

* Standoff over oil after navy fires on approaching tanker

* Tripoli struggles to overcome eastern blockade

* Protesters offering to sell crude independently (Adds details from minister, background throughout)

TRIPOLI, Jan 8 (Reuters) - Libya may sink tankers trying to load at eastern ports seized by armed protesters in an escalating confrontation over control of oil exports, Prime Minister Ali Zeidan said on Wednesday.

His warning came after Libya's navy fired shots at the weekend to ward off a tanker that the state-run National Oil Corp. (NOC) said tried to load at one port that has been out of government control for six months.

Brent crude rose above $107 a barrel on Wednesday, supported by the new worries over Libyan supplies, which have been slashed since summer by the blockade of three key eastern ports.

Negotiations to end the protests have failed as eastern federalists, whose self-styled Cyrenaica government seeks more autonomy from Tripoli, have threatened to ship oil independently to world markets in defiance of Zeidan.

Protesters on Tuesday said they would guarantee security for vessels docking at the three eastern ports, inviting foreign tankers to load crude and bypass government control.

"Any country, or company, or gang trying to send tankers to take oil from the seized ports without coordinating with the NOC, we will deal with them - even if we are forced to destroy or sink them," Zeidan said. "We warn all countries there will be no leniency."

The confrontation is a major challenge two years after the fall of Muammar Gaddafi in Libya, where former rebels, militias and tribesman have all resorted to force to make demands on a state that is still mapping out the new democracy.

In the east, the Cyrenaica regional authority and its armed protesters have taken over Ras Lanuf, Es Sider and Zueitina ports, which previously accounted for 600,000 barrels per day in crude exports.

On Monday, the Libyan navy said it fired warning shots at a Maltese-flagged tanker trying to reach Libya to load oil at Es-Sider, but the tanker's owners accused Libya forces of firing on them in international waters.

Analysts said they believed it would be difficult for Cyrenaica protesters to find clients to buy oil because of the government view it considers any shipments that bypass its control as illegal.

Stepping up warnings, Oil Minister Abdelbari Arusi told Reuters on Wednesday Libya will sue any foreign firms trying to buy oil from eastern ports and stop doing business with them.

"Any firm... dealing with the armed groups which have closed the oil ports will be sued and banned from any future cooperation," he said. "There won't be any market for them in Libya anymore. We are warning all global and small firms against dealing with the armed groups."

TOUGH CHALLENGE

The deepening oil standoff adds to Libya's turmoil as Zeidan struggles to control the armed groups that helped oust Gaddafi in 2011 but which have kept their guns and now demand political power and a bigger share of oil wealth.

The conflict is hurting oil revenues, which fund the OPEC nation's government, which has warned it will be unable to pay public salaries if the standoff continues.

The oil minister said Libya was now producing around 650,000 bpd of oil, of which 510,000 bpd was being exported, after a separate protest in the west ended and unblocked the El-Sharara field there.

Output is still roughly half of the 1.4 million bpd achieved in July before the disruption.

"The Libyan people are dying because of a lack of financing. We need financing to treat sick people, we need it to buy food abroad, overhaul schools, hospitals and to build roads," Arusi said.

"If there is no oil then the Libyan people will die."

Zeidan said he could reshuffle his cabinet this week or next in a bid to counter critics, who are pursuing a parliamentary vote of no-confidence against him.

Two years after the fall of their autocratic leader, Libya's transition to democracy is stranded, its parliament caught in deadlock between Islamist and secular parties, and its new constitution still unwritten.

But the eastern confrontation has heightened worries that Libya might break apart as Cyrenaica and the southern Fezzan region demand political autonomy.

The Cyrenaica oil protesters, led by tribal leader and civil war hero Ibrahim Jathran, have shrugged off Tripoli's warning by inviting foreign companies to buy eastern oil.

"We welcome global oil companies ... The oil security guards will guarantee the safety of tankers," said Abd-Rabbo al-Barassi, prime minister of Jathran's self-declared government in Cyrenaica.

He said a newly founded oil company called Libya Oil and Gas Corp would deal with potential buyers. A new army and coast guard, made up of Jathran's fighters, would secure the ports.

Barassi said his group had nothing to do with the tanker shot at by a Libyan navy on Sunday on its way to Es-Sider.

The group is campaigning for a federal state sharing power and oil revenues between Cyrenaica, Tripolitania in the west, and Fezzan, as was the case in the kingdom that preceded Gaddafi's rule. Oil sales were then shared between the regions.

Tribal leaders have sought to negotiate on behalf of the government with the group holding the ports. These talks have gone nowhere, despite pressure from the tribal leaders, some of who see Jathran as a warlord leading Libya into chaos.

(Additional reporting Omar Fahmy; writing by Patrick Markey; Editing by Jane Baird and William Hardy)

Editor's note: Ali Zeidan also announced his readiness to resign from his post, sources told Al Arabiya News Channel.

A Libyan’s Plea to the S.E.C.

Πηγή: New York Times
By NAJWA al-BESHTI
August 17 2012

AFTER four decades of tyrannical rule by Col. Muammar el-Qaddafi, financed largely by our country’s oil wealth, Libyans have taken steps this summer toward a true democracy. Last month, we got to vote in legislative elections, and this month we experienced the first peaceful transfer of power, from the Transitional National Council to a new national assembly, in our country’s modern history.

While we are grateful to the Western countries that helped us topple Colonel Qaddafi last year, something perverse is happening in those countries now. Oil industry lobbyists are using their influence in Washington and Brussels to try to undermine transparency measures that could help prevent future tyrants from emerging. That must not be allowed to happen.

When Colonel Qaddafi was in power, I worked for Libya’s state-owned National Oil Corporation, in a position that allowed me to observe corruption firsthand. I helped produce audits that detailed the mismanagement of millions of dollars of oil revenues, including the systematic underpricing of oil and the discounting of prices for select foreign companies. I initiated investigations into why millions of barrels of crude oil went missing from an oil field in 2008; presumably, the proceeds had gone into the pockets of the elite.

The regime never explained why it requested the audits, which were never released to the public. Feeling that I had to do something, I naïvely wrote 50 letters denouncing corruption, including three to Colonel Qaddafi’s powerful son Seif al-Islam. The result? I was demoted and suspended without pay. Intelligence agents interrogated me. I received death threats: after an unmarked car slammed into my car, intelligence agents visited me and told me, “Next time could be fatal.”

Today, our allegations of corruption are being examined, but the investigations continue to face obstacles. Earlier this year, based on my reports and those of others, Interpol, at the request of the Libyan government, sought the arrest of the former oil minister, Shukri Ghanem. But on April 29, before he could be detained for questioning, he was found drowned in the Danube River, near his home in Vienna. The Austrian authorities have said they found no indications of foul play, but an inquiry is continuing.

If we are to transform Libya, we must not only investigate the past but also reform the whole relationship between the energy industry and our government. We need to ensure that bidding is fair and open, that deals are transparent and aboveboard and that revenues are used properly. Public disclosure and legislative oversight of contracts and payments are crucial.

We cannot meet these goals without help from abroad. Colonel Qaddafi’s rule depended on the collusion of powerful foreign allies who would turn a blind eye to blatant corruption deals involving international oil companies and his regime.

America can help prevent such corruption from happening again.

The Dodd-Frank overhaul of Wall Street regulations, which President Obama signed into law in July 2010, included a provision, Section 1504, that requires American and foreign companies that are registered with the Securities and Exchange Commission to disclose — country by country and project by project — how much they pay governments around the world for access to their oil, natural gas and minerals. (Federal law already prohibits companies from bribing foreign officials to get or retain business.)

In December 2010, the S.E.C. issued proposed regulations to put Section 1504 into effect. The commission has yet to finalize the rules but is scheduled to take up the matter on Wednesday, at a hearing in Washington. Some of the world’s largest oil and gas companies — along with industry groups like the American Petroleum Institute — are trying to water down the regulations or delay them from taking effect. Some are proposing to exempt resource-extracting companies from having to comply if a foreign government objects, an idea I think of as a “tyrant’s veto.” The industry also claims that complying with the tough disclosure requirements will be costly and may place companies at a competitive disadvantage — but these arguments have been thoroughly discredited, making it hard not to conclude that many would simply prefer to carry on operating in secret.

A similar fight is playing out in Europe. The German government is resisting requirements for project-level reporting, and the European Council, which comprises leaders of the European Union’s member states, has called for a weaker form of disclosure. However, some members of the European Parliament continue to champion strong disclosure requirements.

Having helped Libya to overthrow a tyrant, the United States and the European Union can now help win the peace — by committing themselves to strong transparency standards for energy companies. In Libya, we don’t want our oil resources to bolster new tyrants, and the world shouldn’t either. When tyrants control energy supplies and gun down their own citizens, they invite only rebellion, military intervention and oil-supply shocks. We want a stable, prosperous country under the rule of law, in which citizens benefit from their natural resources and hold their leaders to account.

I urge the S.E.C., as well as European regulators, to resist the lobbying from the oil, gas and mineral industries and to issue strong rules consistent with the spirit of Section 1504. By making the oil companies answerable to the public — in America, Europe and everywhere they do business — we can turn oil into a force for transparent and open commerce rather than corruption and repression.

Najwa al-Beshti is a former head of contracts at the state-owned National Oil Corporation of Libya.

The West wants Russia out of Libya

Πηγή: Pravda
By Sergei Balmasov

Oct 25 2011

One of the main intrigues in Libya now is connected with the division of the oil and gas riches of the country between the winners. Hardly had the war in the country ended when foreign companies decided to share the Libyan market between them. They already ask for quotas and licenses from the rebels.

Apparently, the West intends to ignore Russia's interest in the country. Russia had not executed its obligations connected with the training courses for Libyan students, the country's National Oil Corporation said.

The corporation invited Gazprom's representatives to discuss the question in Tripoli. The Libyan side does not exclude that the contracts, which were concluded with the company under Gaddafi's rule can be revised.

The chairman of the oil company, Nouri Berruien, the Russian side is supposed to fulfill its obligations. Berruien also said that he wanted to know the reasons why Russia did not abide by its obligations. It seems that the new Libyan authorities deliberately want to terminate the agreement.

Russia's gas giant Gazprom has the right to explore several oil fields in Libya. In addition, Moscow agreed to make concessions for the previous Libyan administration. Russia agreed to write off nearly a half of Tripoli's debt in exchange for guarantees to conclude multi-billion contracts in oil, gas, transport and defense industries.

Western media say that the new Libyan authorities may revise the contracts concluded under Gaddafi's rule. Russia and China stood up against the bombing of Libya. Therefore, these two countries may suffer losses now.

Will Russia ever receive the Libyan debt now? Pravda.Ru asked this question to Sergei Demidenko, an expert with the Institute of Strategic Assessments and Analysis.

"There are different points of view about the future division of Libyan oil and gas resources. I personally believe that Russia is not going to get anything in the new Libya now. I mean that about all industries, including the defense and the transport spheres.

"The Libyan market is not that large. However, it is a good piece for large oil and gas companies from Britain, France, Italy and so on. It would be strange if the West could let Russia in there too. It will be a tight place even without Russia. Italy's Eni controlled 35 percent of Libyan oil shipments prior to collapse of Gaddafi's regime. Italy's neighbors have a very good appetite at this point, so there will obviously be a fight.

"One may also assume that the return of foreign companies to the Libyan market will not go smoothly. Transnational corporations will declare their intention to revise the scheme of cooperation that was practiced under Gaddafi's rule. The companies will demand the changes that will bring maximum profit for them. In other words, they will try to pay as little as possible to Libya and dictate their conditions to the country.

"This may probably work in the beginning. However, one may not give any guarantees for the future. The work conditions for foreign companies in Libya will only get worse, because Libya will not be able to avoid the crisis of power.

"When Islamists clash with tribal groups in the country, the country will plunge into chaos. It will be very problematic to work under such conditions. The winners will have to do the same things that were done in Iraq after the collapse of Saddam Hussein's regime. they will have to establish normal life, rebuild the infrastructure, recreate the armed forces, and so on.

"Otherwise, the Libyan population will grow radical very quickly. Those rebels who armed their guns at Gaddafi's followers may choose another target - Western representatives. It is an open secret that the war in Libya began because of its oil and gas. Everything has its price, though.

"Until recently, the Libyan oil made up from two to three percent in the total volume of oil production. This is basically nothing if we look at it in global scale. It is possible to extract more oil in Libya. Only one-third of the geological map of this country has been explored.

"To expand the production, one would have to invest in the geological exploration first. Secondly, it is necessary to create the adequate infrastructure. All of that requires colossal investments that will have to be made under colossal risks.

"Libya was bombed for seven months. Many buildings in the country were demolished, the water supply system was damaged - this is very big money. The question is where this money can be found under the condition of the global crisis. Will the West be willing to invest in Libya like that at all? It is quite possible that the West will simply wrap up its activities in Libya and there will be no one there to extract oil. Just look at what's happening in Iraq. Terrorist acts and explosions of oil pipelines continue to occur there."

Libya denies knowledge of Heritage Oil acquisition of Benghazi services company

Murky: Libya's NOC chairman has warned Heritage Oil that that any accord for the transfer of licenses to Heritage would be "null and void" as such a move first requires NOC approval

Πηγή: Malta Today

By KARL STAGNO-NAVARRA

Oct 4 2011

The head of Libya's National Oil Company has denounced UK oil firm Heritage Oil over its announcement this morning that it had ‘acquired’ 51% in a Benghazi-based oil services firm.

NOC chairman Nuri Berruien said that he “has not” been approached by Heritage Oil over the acquisition of the controlling interest on Sahara Oil Services (SOSH) which holds long term permits and licenses to provide oil field services in Libya, for US$19.5 million in cash.

Speaking to Dow Jones Newswires, Nuri Berruien said that any accord for the transfer of licenses to Heritage would be "null and void" as such a move first requires NOC approval.

It wasn't clear if Berruien was exclusively referring to licenses to explore and produce oil and gas, or for all licenses to operate in Libya.

A Heritage spokesman stressed that the deal with Sahara was for the provision of oil field services, not exploration and production licenses, which he said Heritage would still have to bid for.

Earlier today Heritage Oil– which holds a joint production agreement with the Maltese government since 2007 - said that today’s acquisition "will help to speed up its drilling programme in Malta."

“Heritage plans to use SOS to assist with the drilling of its targets offshore Malta and is actively looking to contract a rig to bring forward the drilling of Area 7," the spokesman said.

Heritage established a base in Benghazi this year and has been dealing with senior members of the National Transitional Council, the company said.

It is unclear however, what has changed since the revolution, since Heritage Oil’s operations offshore Malta were threatened by Col. Gaddafithrough a formal request to ‘cease and desist’.

In a letter sent to Heritage Oil in 2008, Gaddafi’s former oil minister ShokriGhanem had warned the company that Area 7 was in Libya’s territory.

Heritage Oil have so far not said what has changed since, and whether the NTC was now renouncing sovreignity over Area 7.

Last month, MaltaToday reported that Heritage Oil was ‘scouting’ Libya amid the revolution that ousted Col. Gaddafi’s 42 year rule, and was seeking lucrative security contracts. However, the spokesman denied the report.

Richard Griffith, analyst at Evolution Securities, said the move "could prove to be a very shrewd investment" by the company.

Heritage Oil shares, however, were down 2.9 percent at 217.8 pence in early trading on the London Stock Exchange.

The company's CEO Tony Buckingham said they are "well placed to play a significant role in the future oil and gas industry in Libya."

"This acquisition is consistent with Heritage's first mover strategy of entering regions with vast hydrocarbon wealth where we have a strategic advantage," Buckingham said.

Besides Malta, Heritage has exploration projects in the Kurdistan Region of Iraq, the Democratic Republic of Congo, Pakistan, Tanzania and Mali, and a producing property in Russia.

Total JV chief wants Libya oil sector freed

French oil company Total exploited only a marginal share of Libya’s oil output before the war.

Πηγή: Al Arabiya
By By JESSICA DONATI AND ALI SHUAIB (Reuters)Oct 4 2011


The head of French oil company Total’s Libyan joint venture called for the formerly all-powerful National Oil Corp (NOC) to act more as a regulator and leave smaller companies with more operational independence, cutting red tape.

“NOC should retain the role of regulator and more authority should be given to individual operators,” Ahmed M. Abulsayen, chairman of the Operators’ Committee, told Reuters in an interview.

He said optimizing NOC’s role was a key issue for the sector and red tape had to be cut to allow greater efficiency.

The government ministry in charge of oil should be responsible for some functions the NOC previously carried out such as issuing new bidding rounds and concluding contracts, he said.

“These privileges are all state authorities that should be separated,” he said, adding that bureaucracy needed to be trimmed to speed up processes.

“The new government, transitional or future, will have to take part of the load of tasks from the NOC. That goes without saying,” he added.

Oil pumping


Total’s offshore Al-Jurf field is currently pumping around 41,500 barrels per day of oil, not far off full capacity of 50,000 bpd.

The first cargo of crude to be pumped from Al-Jurf since the outbreak of war will not be exported this week, but sent to a domestic refinery near the capital instead, Abulsayen said.

The first tanker would sail with just under half a million barrels of crude, and stop off at Mellitah on its way to the Zawiya refinery, where it would load an additional quarter of a million barrels from the terminal.

Exports remained complicated by sky-high shipping insurance rates, he said, adding there remained confusion over which waters were part of the war zone decreed by NATO and the transitional government needed to take action in order for operations to return to normality.

The main obstacle preventing foreign workers from returning, Abulsayen said, was the difficulty in obtaining visas, navigating customs and a lack of shipping agencies willing to operate in the area.

Total’s second field near Sirte, where fighting continues, remained offline as the danger of attacks persists and was unlikely to begin producing anytime soon, as it feeds into the Waha system and badly damaged oil terminal Es-Sider.

A team of locals remained close by, he said, but had been unable to prevent looting and supporting infrastructure from being destroyed.

“We never left the field alone,” said Abulsayen.

Catastrophe averted


Key activities to maintain the condition of the offshore field were undertaken illegally and independently from NOC to avert the risk of a catastrophic spill, Abulsayen said.

“We operated out of Zarzis [Tunisia] without a mandate” said Abulsayen, adding that two missions had been put in place without the official approval from NOC, as the state oil companies was overloaded with other tasks.

The potential magnitude of spill at Al-Jurf could have caused a disaster ten times the scale of Macondo, in the Gulf of Mexico, he said, as offshore fields can be dangerous if the condition of facilities is allowed to deteriorate.

Abulsayen added that efforts made during the height of the conflict had enabled Total to restart operations rapidly.

“Off shore fields are a hostile environment and it was the result of our collective efforts over eight months that we were able to make a speedy return to production,” he said.

ENI Chief in Tripoli

Πηγή: Petroleum Africa
Tuesday, September 13, 2011

ENI’s chief executive Paolo Scaroni was in Libya securing his company’s position as Libya’s number one foreign producer. Scaroni met with officials from the National Transitional Council (NTC) as well as officials from the country’s state-run oil firm National Oil Corp. (NOC).

In addition to the meetings with NTC and NOC officials, the Scaroni delegation visited the company’s offices in Tripoli to meet with local staff and to discuss the timing and arrangements for the restart of oil and gas production.

The main aim of the trip was the establishment of the necessary measures to recover exports through the Green Stream pipeline, which may carry 10 bcm per year of gas from the Libyan coast to Italy.

During his visit Scaroni stated: “Our priority is the quick recover of Libyan gas export towards Italy, aiming to guarantee Italy with the security of supplies.”

Libya in power struggle over oil group

Πηγή: FT
By Javier Blas

12 Sep. 2011

A regional power struggle is emerging over Libya’s energy wealth as the cities of Tripoli and Benghazi compete to host the powerful state-owned National Oil Company.

The battle for the NOC, the most important company in Libya, comes as the country grapples with economic and political reconstruction following the revolution that ended Col Muammer Gaddafi’s 42-year regime.

The tussle so far appears to focus on job creation and regional prestige rather than on oil revenues, which account for 95 per cent of the country’s income. Libya earned last year $44bn from oil exports, according to the US department of energy.

The NOC headquarters have been in Tripoli since the early 1970s, a few years after the coup d’etat that brought Col Gaddafi to power. But the company was originally founded in Benghazi in 1968, when the eastern city was the centre of Libya’s nascent oil industry.

Benghazi politicians, businessmen and the “17th February Committee for Oil and Gas” – a grouping of workers from the industry – are now pushing to relocate the company back to Benghazi. The embryonic movement has sympathetic ears among some members of the ruling National Transitional Council, officials said.

“The big oilfields are near Benghazi,” said Yousif Al Gheriani, head of the 17th February Committee for Oil and Gas. “We need an economic balance with Tripoli.”

Mustafa El Huni, an influential member of the NTC who oversees energy policy, said one idea under preliminary consideration was to split NOC into as many as three companies: one focusing on so-called upstream operations, or exploration and production; another on downstream activities, or refining; and a potential third focusing on natural gas.

Mr El Huni told the Financial Times that the split would allow “efficiency” gains, but he acknowledged that “having two or three NOCs means we could distribute” the companies in different cities, “rather than having all in just one place”. He added: “This would be a positive side effect [of the split].”

Ali Tarhouni, Libya’s prospective oil minister, declined in an interview to comment on the possible NOC split, saying: “This is all talk way, way ahead of its time.”

His remarks reflect wider efforts by NTC officials to reassure their international allies by projecting a sense of continuity in the Libyan economy’s most important institutions.

The NOC controls all the levers of the oil sector, although the NTC is likely to create a ministry of oil that would take away some of the company’s power. Presently, the NOC is the largest partner in joint ventures with foreign oil companies in Libya, including Eni of Italy, Repsol YPF of Spain, Total of France and US-based ConocoPhillips, Marathon, Hess and Occidental Petroleum.

Mr Al Gheriani said that locating the company in Benghazi would bring jobs to the city. “The international oil companies would come here and also the service companies.”