x Abu Dhabi, UAEThursday 27 July 2017

Production resumes at Libya's largest refinery

Libya's largest refinery has restarted for the first time since the fall of Qaddafi after delays stemming from a dispute between the national oil company and its UAE-based partner.

The Ras Lanuf refinery restart was pushed back several times because of a disagreement over the price at which NOC would provide the crude feedstock. Above, a Libyan rebel fighter wearing his old national flag as a cape flashes the
The Ras Lanuf refinery restart was pushed back several times because of a disagreement over the price at which NOC would provide the crude feedstock. Above, a Libyan rebel fighter wearing his old national flag as a cape flashes the "victory" sign on the outskirts of Ras Lanuf on March 7 last year. AFP

Libya's largest refinery has restarted for the first time since the fall of Qaddafi after delays stemming from a dispute between the national oil company and its UAE-based partner.

Trasta, the energy arm of Dubai's Al Ghurair Group, owns half the Ras Lanuf refinery alongside Libya's National Oil Corporation (NOC), a share it secured in 2009 in exchange for agreeing to lead a US$2 billion (Dh7.34bn) upgrade of the plant.

The refinery, which accounts for nearly two thirds of Libya's refining capacity with 220,000 barrels per day, resumed operations on Friday after lying dormant since February last year, the beginning of the uprising against Muammar Qaddafi.

The long wait to revive Ras Lanuf illustrates the difficulty in doing business both during and after the revolution as contracts signed during the Qaddafi regime come under scrutiny.

Its restart was pushed back several times because of a disagreement over the price at which NOC would provide the crude feedstock.

Last October, just weeks before Qaddafi's death and the end of the civil war, Sultan Al Ghurair, the director of business development at Trasta, said that his company was prepared to restart the refinery, but added: "We are very patient."

Al Ghurair Group did not comment for this article.

Situated on the coast between Tripoli and Benghazi, the refinery became a flashpoint during the civil war, with 17 people killed in just one month when loyalists sought to seize control of the refinery from rebels.

Following Qaddafi's death, the National Transitional Council (NTC), the Libya's temporary guardian government, created a committee of 20 people to scan nearly 10,000 contracts spanning industries from energy to property development for signs of corruption.

The review alarmed investors who feared that their contracts would be torn up, although Mustafa El Huni, the NTC deputy chairman, has made repeated assurances that changes will be made in a "spirit of mutual cooperation".

"It seems like those deals were part of the old opaqueness that surrounded the oil industry during the Qaddafi era, so I think it's understandable that there's has needed to be some reevaluation and some renegotiation," said Samuel Ciszuk, a consultant at KBC Energy Economics.

The restart of Ras Lanuf relieves some of the pressure for Libya to import fuel and also takes supplies of Libya's prized light, sweet crude off international markets. On Friday, Brent crude rose by nearly $2 to $114 a barrel.

ayee@thenational.ae