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Clashes erupt at oil terminals in Eastern Libya

08.20.2013  | 

The closure of Libya's key oil ports by striking guards and workers, which has more than halved the country's oil production in recent weeks, has helped push oil prices higher, in addition to the Egypt crisis.

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By BENOIT FAUCON

Clashes erupted Tuesday at oil terminals that had been closed in Eastern Libya, oil officials said, the latest evidence of mounting tensions in the oil exporting nation, after an unauthorized tanker was blocked from entering another port on Monday.

The forced closure of Libya's key oil ports by striking guards and workers, which has more than halved the country's oil production in recent weeks, has helped push oil prices higher, in addition to the crisis in Egypt.

"In [Libya oil terminal] Brega, there's some fighting" between supporters of a striking oil-guards leader and his opponents, Yousef Ghariani, the head of Libya's Oil and Gas Workers Union, told the Wall Street Journal.

Separately, "there is a conflict" at Zueitina terminal, a top oil official, who declined to be named, told the Wall Street Journal. "People from the area marched to the terminal [to protest] against those who stopped the operations."

Oil is usually exported from Libya through a partnership between the country's National Oil Corp. and oil majors Occidental Petroleum and OMV.

Peaceful protests against the closure of Es Sider were also ongoing, Libya's largest oil terminal, Mr. Ghariani said.

The clashes and protests underscore rising tensions over the standoff, which has cut oil production to levels not seen since the 2011 civil war that toppled strongman Moammar Gadhafi and has cost the country over $1 billion in lost revenue to date.

The news also comes after Libya's coast guard Monday stopped a tanker from entering at the Es Sider terminal, amid fears gunmen are trying to market oil outside government control. According to Libyan oil officials, the vessel didn't have any authorization to load from the port, which exports oil from concessions run by Libya's NOC with Marathon Oil, ConocoPhillips and Hess.

Libya's prime minister Ali Zeidan alleged last week that some of the striking guards that have blocked oil exports for weeks in Libya's central and eastern regions were trying to illegally market stored oil under their control. While threatening a military intervention to remove the strikers, Mr. Zeidan warned any vessel approaching without clearance "will be bombed from the air and the sea."

Port workers and guards have said they are striking for higher pay and more jobs for local people.

The closure of the majority of Libya's oil ports has more than halved the country's oil production to about 600,000 bpd. Libyan oil officials have warned the strike could have a long-term impact on the industry. Oil minister al-Arousi said last week the country had lost $1.6 billion in revenue as a result of unrest.

"We have lost a lot of customers...who have gone to other markets for their oil," Mr. al-Arousi said.

The disruptions in Libya are contributing to a new surge in the global price of oil that has already been fuelled by Egypt's political crisis. Though not a large exporter, Egypt is a key oil route through its Sumed pipeline and the Suez canal.

The return of geopolitical concerns to oil markets has dimmed hopes that a US shale boom could keep a lid on the prices motorists pay at the pump.


Dow Jones Newswires



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