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April 04, 2011

Libyan Rebels Preparing to Export Oil

Libya's rebels are about to export their first oil shipment under a deal with Qatar to market crude from eastern Libya.

The Libyan opposition provisional national council is on the verge of gaining a key source of revenue as it prepares to begin shipping oil from the eastern port of Marsa al Hariga.  

An oil tanker arrived Tuesday to take delivery of the first shipment.

Most of Libya's oil fields are in rebel-controlled territory, but production has slowed to a trickle due to the political and military conflict.  A rebel spokesman said recently that the provisional council was hoping to increase production from 150,000 barrels per day to 300,000 barrels per day.

Al Jazeera TV reported Tuesday that fighting on the fringes of several eastern Libyan oil fields was endangering production facilities.  It said forces loyal to Libyan leader Moammar Gadhafi had cut power to the Serir oil field and had arrested some employees at the Mesila field.  Unconfirmed reports Monday spoke of artillery fire from pro-Gadhafi forces on both oil fields, but there was no confirmation of damage.

The government of Qatar has agreed to help the rebels market crude oil from eastern Libya.  The opposition needs hard currency and weapons to fight Gadhafi loyalists.  Qatar, France and Italy, Libya's former colonial power, have recognized the rebels as the country's legitimate government.

Khattar Abou Diab, who teaches political science at the University of Paris, says both Libya's strategic location on the Mediterranean Sea and the country's oil and gas reserves make it a prize for international rivals:

He says that Libya is the gate to sub-Saharan Africa, and that oil is one of two key interests. The first, he says, is geo-political, and the second is oil and gas, because Libyan oil is among the least expensive to extract and among the best in terms of quality.  He says there may also be untapped oil fields that oil companies know about and are hoping to compete for.

Abou Diab says Italy, Britain and France all want to protect their interests in Libya, as do China and Russia.  He notes Libya returned U.S. oil concessions several years ago when political ties were restored.  The French oil conglomerate Total has important oil interests in eastern Libya, and Italy has an important gas pipeline from the town of Brega.

Current fighting between Gadhafi loyalists and rebel forces has paralyzed Brega and the neighboring oil facility town of Ras Lanouf.

In western Libya, gasoline is reported to be in short supply and recently-imposed U.N. economic sanctions are crippling the economy.