Libyan oil company resumes exports after months of blockade

CAIRO (AP) – Libya’s national oil company announced on Friday it has resumed crude exports, ending a months-long blockade that eastern tribes had called to protest revenue distribution in the war-torn country.

The National Oil Corporation said the resumption of exports from Libya started on a small scale, and would reach just 650,000 barrels a day by 2022 because extensive repairs, costing “billions of dinars”, are needed in the facilities following months of neglect.

The corporation also lifted force majeure on all oil exports, promising to fulfil its existing contracts for the first time since January.

Powerful tribes loyal to east-based military commander Khalifa Hifter had reduced the country’s production of 1.2 million barrels a day to a trickle in January as a challenge to their adversaries in western Libya, the United Nations (UN) supported government in the capital, Tripoli. Last week, the tribes offered to end the blockade and negotiate a restart in production as part of a political settlement.

Libya on Friday shipped 730,000 barrels of crude oil from Es Sider, the country’s largest port, to Italy, according to Ali el-Farsi, the spokesman for the Waha Oil Corporation.

“We are finally getting back to production and staying away from political conflict,” el-Farsi said. “We are not supporting any one government, we are just oil workers who want to get our salaries again.”

Oil, the lifeline of the Libyan economy, has long been a key factor in the civil war, as the two rival governments and militias jostle for control over the coveted revenue.

While Hifter’s forces control Libya’s oil crescent in the east and south, the Tripoli administration controls the Central Bank, which holds the country’s oil revenue. The shutdown, which deprived the corporation of over USD6.5 billion, was meant to put pressure on the Tripoli administration to provide more resources to the east and crack down on alleged corruption.

The National Oil Corporation said recent high-level negotiations over resource distribution with the Tripoli government – supervised by the UN and the United States (US) and involving other “regional countries” – had helped restart exports.

“We are very glad to finally be able to take this important step to national recovery,” said Chairman Mustafa Sanalla. He thanked “all parties” for a successful round of discussions, without elaborating.

The US Embassy in Libya welcomed the resumption, saying the National Oil Corporation would work with the UN to ensure “that revenues are not misappropriated but rather preserved for the Libyan people”.

Italy, a key player in the North African country with its oil giant Eni, also hailed the announcement. Italy’s foreign ministry said the shutdown had “provoked enormous damages to the finances of Libya and aggravated the humanitarian conditions of the Libyan people”.