The Largest Oil & Energy Job Board

Rival Libyan government makes move for oil power, captures field

Libya's political strife intensified as a rival government that has seized the capital stepped up its battle for power and legitimacy, taking control of a key oilfield, according to a security commander, and meeting its first foreign minister.

An armed brigade from Operation Dawn, one of the factions backing the rival government, took control of Libya's largest oilfield, El Sharara, a commander in charge of security at the site said. If confirmed, it would be the first attempt to take physical control of oil production by the rival government.

The Tripoli-based rival administration has also appointed its own oil minister in a move seen by analysts as designed to assert more pressure on Libya's National Oil Corp, which had previously remained largely above the political forces tearing at the seams of the country.

While the National Oil Corp said El Sharara would reopen, the growing turmoil has cast doubt on Libya's ability to maintain its recent rebound in output, which contributed to a near 30 per cent drop in international oil prices since June.

"The manager of the field insists reopening the field just because he wants to make good relations with the invaders," said commander Abdulhamid Kraeer, who belongs to a brigade from Zintan allied to the internationally recognised government, which has fled to the country's east.

"But it is difficult to reopen the (El Sharara) field as there will be, I guess, an escalation," he said, adding that the attackers belong to Operation Dawn, the brigade controlling Tripoli. Dawn was not immediately available for comment.

Libya's oil production rose above 900,000 barrels a day in September, sharply above lows of 100,000 barrels a day in June.

But it now looks increasingly under threat, and has already fallen to around 500,000 bpd at most.

In another sign of shifting power, Sudanese foreign minister Ali Karti flew to Tripoli to meet Omar al-Hassi, prime minister of the rival government. A Turkish envoy had already met Hassi, who has so-far been shunned by Western powers.

The internationally recognised government, based in the eastern city of Tobruk since August, has not appointed an oil minister, leading to questions about who will represent Libya when the Opec producer group meets in Vienna later this month.

LEGAL QUESTIONS

Geoffrey Howard, North Africa analyst at Control Risks, said the development at El Sharara highlighted the struggle between the rival political factions vying to run the country.

He cautioned that Western powers' opposition to the rival government, which is aligned with a number of Islamist factions, could lead to curbs on Libya's ability to export oil.

"We could potentially see sanctions imposed if Islamist groups take control of facilities, and then Libya will struggle to attract credible buyers," he said.

In September, the United Nations started a dialogue between the parties based on the assumption the House of Representatives, which is also located in the east, is the legitimate body.

That position has come under pressure with a ruling from Libya's Supreme Court declaring the house invalid. The court is based in Tripoli but a muted response from Western powers shows the struggle to come to grips with the new realities.

NOC also said another field, El Feel, where production was halted by a power outage due to the violence at neighbouring El Sharara, could return.

Another oil official, asking not to be named, offered a more cautious opinion. "It might take a few days as the workers need to return first."

Separately, a sit-in protest by security guards over unpaid wages halted exports from the eastern Hariga port, and the port remained closed.

Rebels who have seized oil ports in the past to press demand for regional autonomy said they would declare independence in the east if the world recognised the rival government in Tripoli. -- Reuters

NA
Copyright:
Reuters
Published on:
November 11, 2014
Source url:
http://www.tradearabia.com/news/OGN_269360.html
Copyright © 2016, OilFinity. All Rights Reserved. Powered by Talenetic Job Board Software