Libya rebels seek help to boost oil exports

Reuters News
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Posted: Apr 13, 2011 8:19 AM
Libya rebels seek help to boost oil exports

By Humeyra Panuk and John Irish

DOHA (Reuters) - Rebels fighting to overthrow Muammar Gaddafi said on Wednesday they wanted to export more oil to pay for food and medicine, but buyers in Europe were wary of violating international sanctions.

The rebels control fields that currently pump 100,000 barrels per day of crude, Mahmud Awad Shammam, a spokesman for the rebel Libyan National Council (LHC) said on Wednesday, but are only exporting what he termed a "minimal" amount of oil.

Italy was the top consumer of Libyan crude before the conflict broke out. It will not resume imports and wrestled with how to provide the cash-strapped rebels with fuel and other supplies without violating sanctions, an official said.

"It (crude oil imports) has not been considered yet, we need to find concrete mechanisms to work around this asset freeze," foreign ministry spokesman Maurizio Massari told reporters.

Libya's has been on the U.S., European Union and United Nations sanctions lists since March. Although the rebels have been unofficially excluded from them, Western oil firms remain reluctant to buy their oil.

Oil exports have been at a standstill since the crisis erupted in March, helping send crude prices to over $125 a barrel, their highest since July 2008.

Rebel officials did not provide more details on their claimed oil output. Libya's largest oil field, Sarir, was shut earlier this month after pro-Gaddafi forces attacked it and an executive with the rebel firm operating the field said on Sunday it would not restart until security improved.

QATARI ROLE

Qatar, which is marketing the rebels' crude, said on Tuesday it had facilitated the sale of 1 million barrels of oil this month as well as arranged the shipment of four cargos of fuel to the rebel stronghold of Benghazi and was ready to support further transactions.

"There is a formula but we are not receiving any cash. Instead we are receiving aid," Shammam said, adding the rebels still faced shortages of gasoline.

Saudi Arabia and other OPEC producers unilaterally boosted oil output in an effort to compensate for the loss of supplies, but the kingdom throttled back output recently due to slow demand, sources told Reuters on Tuesday.

Oil market players believe Qatar played a role in helping trading house Vitol export a cargo of Libyan crude earlier this month and may be assisting Trafigura, which said on Wednesday it was discussing the export of crude oil from rebel-held eastern ports of Benghazi or Tobruk.

Vitol has declined to comment and Qatar has not said whether it was involved in the Vitol or Trafigura shipments.

A rebel official with direct knowledge of the LNC's export plans refused to comment, saying the attack on Sarir was triggered by media reports of planned rebel oil exports.

"We are at war, and it's for the security of our (oil) supplies," the official said.

Meetings of the Libya Contact Group will start in Qatar on Wednesday regarding Libya's future, and will include representatives of the LNC.

The group will ask Western governments to provide $1.5 billion in aid to help meet the needs of civilians in rebel-controlled areas and would like to arrange to receive humanitarian aid in return for oil shipments, Shammam said.

(Additional reporting by Emma Farge and Robert Campbell; writing by Reed Stevenson and Robert Campbell; editing by William Hardy)