Guards blockade Libyan oil port

13 July 2014

Protesters close eastern terminal demanding money denting export boost hopes

The Libyan oil port of Brega has been blockaded by members of the Petroleum Facilities Guard (PFG) demanding money and jobs, and dashing hopes of an increase in exports just days after acting prime minister, Abdullah al-Thinni announced “the end of the oil crisis.”

The protesters are angry about salaries that haven’t been paid and a recent leadership change at the PFG according to an official for state-run Sirte Oil, which runs oil operations in Brega.

“The PFG closed down the port in Brega in protest to the government’s decision to assign Ali Alahrash as head of the PFG, in place of Edris Bukhamada. But, also because many of them have not been paid in a while,” said the official who asked to remain anonymous as he feared for his safety.

“Talks are being held this evening to try and fix this problem,” he added.

Bukhamada comes from the Brega area and was forced to stand down earlier this year as part of a deal to reopen the ports of Zuetina, Marsa al-Hariga, Ras Lanuf and Es Sider.

Protesters are also angry about unemployment in the area according to Brega Senussi Alhtheri, a spokesman for Ibriham Jathran, the rebel leader who seized control of the four ports in eastern Libya in the summer of last year.

“The company [Sirte Oil] employs around 1,000 locals, and the people of Brega are pushing for another 500. Jathran was going to get involved to try and fix things, but he was advised to stay out of it,” said Alhtheri speaking from Ajdabiya, an oil town 80km from Brega.

Members of the Petroleum Facilities Guard (PFG) have been involved in a long-running dispute with the central government over salaries, but this dispute was thought to have been resolved with large pay outs.

The new disruption comes after a string of government gains, taking back oil infrastructure from militants. On 8 July Libya’s NOC announced that the El-Sharara oil field, with a capacity of 340,000 barrels a day (b/d) had resumed production. It had been closed for more than four months due to protesters making financial and political demands.

The ports of Ras Lanuf and Es Sider, which have a combined capacity of 560,000 b/d were handed back to the government by rebel leader Ibrahim Jathran on 2 July after nearly a year of blockades that cost the government billions in revenue.

Though force majeure was lifted from the two terminals on 6 July they are yet to see any exports. Analysts are worried that lack of maintenance and damage resulting from the blockades will mean an extended delay before tankers can start loading.

“The closure of Brega breaks the recent run of positive news with the eastern terminals and then the Sharara field reopening,” says Energy Aspects North Africa analyst Richard Mallinson.

“This underlines the reality that protests are still a constant threat to Libya’s oil sector. The impact on international oil markets will be limited as Brega cargoes have not been reaching export markets as they have been going to keep the Zawiya refinery running. So there will be no direct loss to Libyan export volumes,” Mallinson says.

“The refinery should not be receiving feedstock from the restarted Sharara field. If the terminal remains closed for any length of time then the fields that supply it will need to be shut in, which will reduce production by around 50,000 b/d,” he added.

The new oil protest at Brega comes amid increasing international concern about unrest in Libya. On Saturday 12 July Jen Psaki, spokesperson for the US Department of State, released a statement saying the US is “deeply concerned by the ongoing violence in Libya and dangerous posturing that could lead to widespread conflict there”.

Anti-jihadist renegade general Khalifa Haftar is currently waging a bloody war with Islamist militants in Libay’s east without the government’s authorisation and has expressed the destire to start operations in Tripoli, Libya’s capital.

As security continues to be eroded kidnappings and assassinations are increasing. Army Colonel Tawfiq Sheikhi was shot and killed in Benghazi in the morning of 11 July. Air force Colonel Ibrahim Dressi was shot and killed in the city after prayers on Thursday 13 July.

In Tripoli flights to and from the international airport were suspended on 13 July due to militia clashes in the surrounding area.

Libyan hydrocarbon exports are also under threat due to the threat of strikes in Italy where unions say they are prepared to shut off a strategic pipeline feeding gas from Libya as part of industrial action targeting Italian oil and gas company Eni. Workers are concerned that thousands of jobs are under threat as part of a restructuring at the lossmaking business.

Crude exports currently stand at over 300,000 (b/d), a fraction of the 1.4m (b/d) the country was exporting last summer before rebels took control of key oil infrastructure.

Additional reporting by Hassan Morajea

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