Libya's NOC Calls for End to Blockade

Libya

By Reuters 2016-09-19 20:10:33

Libya's National Oil Corporation (NOC) called on Monday for the reopening of pipelines from major oil fields in the south west of the country.

Last week the NOC said it would restart exports from the eastern "Oil Crescent" ports of Es Sider, Ras Lanuf and Zueitina, which were seized on September 11-12 by forces loyal to eastern commander Khalifa Haftar.

NOC Chairman Mustafa Sanalla has said he hopes developments at the Oil Crescent ports could herald a breakthrough in efforts to revive production across the country.

He has called for a "new phase of cooperation" between Libya's factions, and for the end of the blockade as a political tactic.

"The events in the Oil Crescent must have made it clear to everybody that the use of blockade as a tactic in (Libyan) politics is a dead end," Sanalla said on Monday.

Protests by the southern branch of the Petroleum Facilities Guard (PFG) that shut the pipelines had cost $27 billion in lost production, he said.

Libya is highly dependent on oil export revenues and needs to revive production to prevent economic collapse.

Armed conflict, political disputes and damage to infrastructure have left oil output at a fraction of the 1.6 barrels per day (bpd) it was producing before a 2011 uprising.

The NOC wants to revive production from less than 300,000 bpd to 600,000 bpd within a month and at least 900,000 bpd by the end of the year, though those targets face major political and security challenges.

On Sunday Haftar's forces repelled a counter attack at Es Sider and Ras Lanuf by an armed faction that previously controlled the terminals and had blockaded them for several years.

A tanker that had docked in Ras Lanuf - the first to do so since at least late 2014 - was withdrawn to a safe distance because of the clashes. The tanker, the Seadelta, and a second tanker, the Syra, were off Ras Lanuf on Monday and a port official said loading was due to start late afternoon.

The NOC says its production targets depend on it receiving fresh funds for its operating budget, on the ports staying open, and on a blockade of pipelines from the south western Sharara and El Feel fields ending.

A pipeline connecting El Feel to Zawiya refinery was closed in November 2014 and a pipeline connecting Sharara to the Mellitah complex was shut in April 2015.

If the pipelines were reopened, Sanalla said the NOC could increase production from the two fields to 250,000 bpd by the end of the year and to 365,000 bpd by the middle of 2017.

"There is a growing consensus that our oil can be a force for unity," Sanalla said in a statement. "It is the only resource available to us to finance our reconstruction."