Eastern Libya ships first oil cargo in defiance of Tripoli

A general view of Libya's Hariga port in Tobruk, east of Benghazi June 28, 2014. REUTERS/Stringer/Files

*A general view of Libya’s Hariga port in Tobruk, east of Benghazi. REUTERS/Stringer/Files.

27 April 2016, Benghazi, Libya — A government based in eastern Libya has shipped its first cargo of crude in defiance of authorities in the capital Tripoli, a bold move that could deepen the divisions that have brought chaos since the fall of Muammar Gaddafi.

The Tripoli authorities asked the U.N. Security Council on Tuesday to blacklist the India-flagged tanker Distya Ameya, which left the eastern Libyan port of Hariga overnight carrying oil they said could not be lawfully sold.

The eastern government has set up its own National Oil Corporation (NOC) to act in parallel to the Tripoli-based NOC that is recognized internationally as the only legitimate seller of Libyan oil.

The tanker departed Hariga carrying 650,000 barrels of crude late on Monday bound for Malta, said Mohamed al-Manfi, a spokesman for the eastern NOC.

Maltese national TV said the ship was in international waters near Malta. The island’s Port Directorate said the tanker was not authorized to dock there and requests would be refused.

The ship last reported its position through the publicly available AIS tracking system earlier on Tuesday as still in Libyan waters.

Libya’s economy depends almost exclusively on oil export revenue and the fight over who controls those funds has driven chronic instability and civil war since long-serving autocrat Gaddafi was toppled and killed by Western-backed rebels in 2011.

Parallel parliaments and governments have operated in Tripoli and the east since 2014. Much of the country is in the hands of dozens of armed groups loyal to one or other government while small areas are controlled by Islamic State fighters.

Political division, labor disputes and security threats have reduced Libya’s oil output to less than a quarter of the 1.6 million barrels per day produced before the uprising.

A U.N.-backed unity government, which arrived in the capital last month, includes figures from across Libya’s divides but has not yet been fully accepted by either of the two loose alliances fighting for power since 2014.

UN RESOLUTIONS
It was not immediately clear how the eastern NOC could conduct a sale given the international opposition. One possibility might be to attempt a ship-to-ship transfer in international waters.

“We are concerned about purchases of Libyan oil outside of legitimate channels,” U.S. State Department spokesman John Kirby said on Tuesday, emphasizing that all sales should go through the Tripoli-based National Oil Corporation.

The United States has stopped unauthorized sales of Libyan oil in the past, sending special forces in 2014 to board a tanker off Cyprus loaded with crude shipped by a group pressing for more autonomy in eastern Libya. The U.S. troops forced that ship to return.

Another senior U.S. official declined to be drawn on whether Washington might undertake a similar operation, saying it would “look at all appropriate mechanisms to address the situation.”

If the shipment went through, it could spark copycat sales that would further shrink the unity government’s revenues.

“That’s very bad for Libya and very threatening, potentially, to the viability of any Libyan government,” the second U.S. official said on condition of anonymity.

Among U.S. concerns are that such oil sales could fund arms purchases by those resisting the unity government’s authority.

The official said the United States and other nations could impose sanctions on those found to violate U.N. Security Council resolutions on Libya, though he did not provide details.

The eastern NOC has long been trying to sell its own oil, but until now those efforts have been blocked by the NOC in Tripoli, with the support of Western countries.

The NOC in Tripoli says any sale by its eastern rival would breach U.N. Security Council resolutions and put the future of Libya’s economy at risk.

NOC Tripoli officials said on Tuesday they had notified the United Nations, countries with naval forces in the Mediterranean and a unity government now working in Tripoli that the shipment had not been authorized and should be stopped.

“We have done our job and we are waiting for them to do theirs,” said spokesman Mohamed al-Harari.

The NOC in Tripoli has continued to run oil production throughout the crisis that followed Gaddafi’s fall, with the funds paying state salaries across Libya, including many of the rival armed groups, which have generally been granted official status.

The Tripoli NOC has retained international backing and says it is working to plan future oil sales with the new U.N.-backed unity government.

News of the eastern NOC’s effort to export its first shipment of oil emerged late last week when the NOC in Tripoli said it had prevented port workers from loading oil onto the Distya Ameya.

It said the shipment had been ordered for a company called DSA Consultancy FZC, registered in the United Arab Emirates.
*Ahmad Gaddar & Libby George, Chris Scicluna & Aidan Lewis; Writing – Aidan Lewis; Editing – James Dalgleish & Richard Chang – Reuters.

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