Libya rebels work to exempt oil from sanctions
Angus MacSwan, Reuters, April 1, 2011
BENGHAZI, Libya (Reuters) – The rebel movement in eastern Libya is discussing plans to exempt its oil exports from sanctions and has also raised the issue with a U.N. envoy, a top rebel financial official said on Friday.
Ali Tarhouni, the rebel official in charge of economic, financial and oil matters, said Qatar would provide fuel, medicine, food and other humanitarian needs to rebels as part of a deal to market oil from the rebel-held east of the country.
Much of Libyan oil production comes from fields in the east of Libya, an area controlled by rebels seeking to oust Muammar Gaddafi. But output has dwindled because shipments have halted, and there is limited storage and refining capacity.
U.N. diplomats in New York said on Monday that U.N. sanctions on Libya did not bar rebels from exporting oil as long as they bypass firms linked to Gaddafi.
“Our demands are simple and clear. Our top priority is lifting the sanctions that stop us exporting our oil,” Tarhouni told a news conference, adding the issue of lifting sanctions had been raised with a visiting U.N. envoy, Abdelilah al-Khatib.
He said that Khatib, who was in the rebel-held stronghold of Benghazi, had responded that he would convey the rebel request to the United Nations.
Speaking earlier in the day, Tarhouni said: “What we want is an exemption from the sanctions. This is our main problem. It is very hard for us, it is an obstacle.”
He said rebels were discussing an exemption with what he described as “friends” in the international community, but did not give details.
Qatar recognised Libyan rebels on Monday, a day after rebels said the Gulf Arab state had agreed to market crude oil produced from east Libyan fields no longer under the control of Gaddafi.
Providing further details of that deal, Tarhouni said: “The Qataris agreed they would market crude oil for us, and we would put the money in an escrow account. We will receive what we need in fuel, medicine, food and humanitarian needs from them.”
Tarhouni said rebels had set up a “quasi-ministry of oil” and that oil staff were now working under that body or for the east-based Arabian Gulf Oil Company (Agoco), which has said it has cut ties with its parent, state-owned National Oil Corp.
Officials of Agoco, the main producer based in the east, have said production was running about a quarter of the more than 400,000 barrels per day the company produces under normal conditions.
Rebels continue to provide basic domestic fuel needs, although towards the frontline of fighting during a rapid advance by rebel forces earlier this week supply lines were stretched and some fuel stations ran out of petrol.
Rebels had controlled all the oil terminals in the east briefly this week but were ejected after Gaddafi’s forces bombarded their positions and chased them back east.
Gaddafi’s forces now control Ras Lanuf and Es Sider, while Brega is now on the frontline and rebels control Zueitina and Tobruk further east.
Asked how the loss of Ras Lanuf or Brega could affect the Qatari pact, Tarhouni said: “The deal has nothing to do with Brega and Ras Lanuf. We are talking about oil production in the southeast. The oil that flows from there is stored in liberated areas,” adding that the oil would be exported from Tobruk.
“The only delay is finding vessels that will carry the oil. That is the only obstacle we have,” he said.
Shipping sources have said Libyan oil shipments were at a standstill with no one attempting to hire tankers.
With few options open, rebels could choose to truck oil across the eastern border to Egypt taking advantage of a NATO no-fly zone providing air cover, said J. Peter Pham, an African security adviser to Western governments and companies.
During the 1990s Iraq smuggled oil consignments via Jordan and Turkey using trucks to bypass sanctions imposed at the time, analysts said.
U.N. Security Council resolutions 1970 and 1973 slapped sanctions on Gaddafi, his family and inner circle, the National Oil Corp, the central bank and other firms linked to Gaddafi.