Libyan rebels export oil through tanker
LONDON - Libyan rebels are exporting oil again for the first time in almost three weeks through a tanker that arrived Tuesday at an eastern port, potentially giving them crucial funding for their fight against Muammar Qaddafi's forces.
The Equator tanker, which can carry 1 million barrels of oil, was chartered by Geneva-based oil trader Vitol SA and would head for China once loaded, according to Rajab Sahnoun, a senior official at the rebel-controlled Arabian Gulf Oil Co., or Agoco, in Tobruk.
The one-off shipment would be only a tiny fraction of Libya's pre-crisis exports of around 1.6 million barrels a day, but is viewed by analysts as a symbolic step forward.
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"The significance is not only that this is the first shipment in 18 days, but also a signal that Libya is open to international trade and shipping," said Michelle Wiese Bockmann, markets editor at London-based shipping data provider Lloyd's List.
The conflict in Libya caused crude exports from the country, 17th among the world oil producers and owner of Africa's largest proven reserves, to dwindle to a trickle, sparking a surge in global oil prices. Benchmark crude was trading at around $108 a barrel on Tuesday.
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A delivery from the port of Marsa el-Hariga would bring in significant funds for rebels as Libyan government forces sought to take back the key oil town of Brega on Tuesday.
Samuel Ciszuk, IHS Global Insight's senior Middle East energy analyst, said that while exports are likely to remain too small to make any global difference for now, they will provide the rebels with their own independent revenue stream, "making their operations and long-term existence much more viable."
The type of delivery the tanker will take would typically be paid after loading, though it was unclear that was the case for Tuesday's shipment.
Patrick Handley, a London-based spokesman for Vitol, declined to comment on the company's involvement in the shipment, citing commercial sensitivity. Athens-based Dynacom Tankers, which owns the Suezmax tanker, also declined to comment on its destination.
There was earlier speculation the shipment would be taken to Qatar for marketing — possibly to Italy and France. Qatar last week offered to market oil from the port, while the CEO of energy company Eni has visited the rebels' de facto capital, Benghazi, with the aim of resuming oil ties.
Vitol, meanwhile, also has its own demands, with around 147,000 barrels per day refining capacity in Antwerp and Fujarah, in the United Arab Emirates, according to its website.
Two tankers from the port in late February were sent to China, carrying 1 million barrels of crude, and Italy, carrying 600,000 barrels of light sweet crude.
Agoco has said it has around 3 million barrels of usable oil stored at the port and that opposition-controlled fields in the eastern part of the Sirte Basin — connected to the port via pipeline — are producing at a rate of 100,000-120,000 barrels per day. That's down from 400,000 barrels per day before the crisis.
However, Ciszuk warned about the likelihood of fighting spreading to the eastern oil areas.
"Given the impact on the rebel movement that the establishment of its own independent revenue stream would have, it is not surprising that the fighting could be drawn into the rebel-controlled eastern oil areas," he said in a note to clients.
The rebels would likely "struggle to successfully repel well-organised raids to damage production and transport infrastructure at the oilfields," he added.
Ciszuk also dismissed reports from Agoco that production from the Sirte Basin could quickly be increased via the recruitment of Arab oil engineers, mainly Egyptians, to make up for a shortage of Libyans, as "very over-optimistic."