Last updated: 15 April, 2014

Libyan oil back on global markets – after blockade that cost $14 billion

Tripoli says the blockade which halted crude exports has cost the country more than $14 billion (10.1 billion euros) in lost revenues.

Libya prepared to resume oil exports Tuesday following a break of more than eight months, after autonomy-seeking rebels agreed to lift their blockade of ports in the country’s east.

The National Oil Co said an Italian tanker, Aegean Dignity, was to start loading from Al-Hariga oil terminal.

Last Thursday, NOC lifted force majeure on Al-Hariga, which has a capacity of 100,000 barrels per day (bpd), opening the way for renewed exports.

The move came a day after the army announced it had taken control of Al-Hariga and Zueitina ports under a deal to end the crippling blockade.

NOC did not refer to Zueitina, which has a capacity of 100,000 bpd, but company sources said Tuesday the authorities were not yet fully in control there.

Renewed exports will restore much-needed revenue stream for Libya’s weak central government following the 2011 overthrow of Moamer Kadhafi.

Activists’ seizure of four terminals last July in pursuit of a campaign for restored autonomy for the eastern Cyrenaica region slashed output from 1.5 million bpd to just 250,000 bpd.

Under the deal reached on April 6, the rebels were to hand over Al-Hariga and Zueitina immediately and cede the other two within two to four weeks.

The NOC declared force majeure at the terminals in August, clearing it of liability for failure to honour contracts.

The recovery of the other two terminals, Ras Lanouf and Al-Sidra, will be an even bigger prize, as they have a combined capacity of 550,000 bpd.

Libya’s oil output is likely to quadruple from current levels and hit 1 million bpd by mid-June following the deal, OPEC secretary general Abdullah El-Badri said Friday.

“I think the first one million barrels will come in two months’ time, but after a million it will take some time … The main challenge now is the security,” he told an international oil conference in Paris.

After initial protests over alleged corruption in the oil trade, the activists have been demanding a referendum on restoring the autonomy that the Cyrenaica region enjoyed for the first 12 years after Libyan independence in 1951.

They have also sought full back-pay for their men, who were employed as security guards at the oil terminals before mounting their blockade.