x Abu Dhabi, UAEWednesday 26 July 2017

Libyan opposition 'has control of oil firms'

Officials say country's output down to 40 per cent as EU says it, along with Russia and Opec, will step in to make up for shortfall a price of crude hovers near the $100 mark in reaction to chaos.

A rebel militiaman stands guard at a oil refinery yesterday in Al Brega, Libya.
A rebel militiaman stands guard at a oil refinery yesterday in Al Brega, Libya.

BENGHAZI // Libya's state-owned oil firms are firmly in opposition hands and their wells continue to pump out crude, company executives say. But they warn that if the country's unrest continues to disrupt their ability to export, they could run out of places to store the oil as soon as mid-March.

"The fields are still running. The oil output is reduced to 40 per cent of the existing capacity," Yussef Ghorreya, the head of the reservoir department at Agoco, the largest of the state-owned firms, said on Sunday at the company's headquarters in Benghazi.

Before the uprising, Agoco was producing 420,000 barrels a day (bpd), a quarter of the national production of about 1.6 million bpd, most of which was exported to European countries such as Germany, Italy, Spain and France. Output is now about 170,000 bpd, said Mr Ghorreya.

Agoco workers sided with the rebels in the first days of the uprising against Muammar Qaddafi that began on February 17. The company's headquarters remains a hive of activity, unlike much of the city, where most shops and businesses remain shut.

"We formed an emergency committee. Each workers is in charge of something and, in coordination with the youth, we are now securing the oil fields," said Sami Elnemer, who works in Agoco's supply department.

About half of Agoco's 5,700 workers are regularly reporting for work, company executives said, adding that soldiers who have switched sides are helping secure the oil installations across the east.

Four fifths of Libya oil production lies in the east of the country, in the territories held by the rebels. Most of the country's wells are in the desert, southeast of Benghazi, the country's second largest city and the de facto centre of the uprising.

Oil company officials say all the other "liberated" national oil companies operating in the east - Brega Petroleum Marketing Company, Sirte Oil, Zawia Oil Refining Company, Jowef Oil Technology, and Waha Oil Company - are acting independently of the National Oil Company (NOC), the state's umbrella institution for oil firm, which remains loyal to Colonel Qaddafi.

However, the executives say they remain loyal to their country and a part of the Tripoli-based NOC.

The NOC "is in Tripoli, and the capital is under siege", Mr Bulifa said. "We had to take our own decision to keep the fields and the company running because the NOC is still following the old regime and we sided with the people."

Shipping is now the major concern of oil company executives. Agoco officials say one tanker loaded with 700,000 barrels of crude was expected to have left the terminal yesterday at Tobruk, a city held by regime opponents near the Egyptian border.

The European Union's energy commissioner also said yesterday that he had information that Colonel Qaddafi's regime no longer controls most of Libya's oil and gas installations, but ruled out imposing a blockade on oil exports from Libya because the installations are now in rebel hands.

"We would potentially be punishing the wrong people," Gunther Oettinger said in Brussels following a meeting of EU energy ministers.

Yesterday, oil prices darted up above US$99 (Dh363) a barrel in Asia because of disruptions in the world oil market caused by the events in Libya, an Opec member state.

The energy commissioner said the EU had sufficient reserves to make up for the shortfall in Libyan supplies and that the Opec oil cartel as well as Russia were willing to help fill the gap. Libya, a member of the Organisation of the Petroleum Exporting Countries, is the fourth largest oil producer in Africa.

Workers say what has happened during the uprising at Agoco, which was formed in 1971 when the government nationalised British Petroleum, was typical of what took place at other state-owned oil companies in the east. On February 20, the fifth day of the uprising, the company's workers joined the opposition, threw out the top management and formed a new management committee.

"Hassan Bulifa, a member of the Agoco committee, said: We never thought to stop the oil fields. It is in the interest of the entire world to keep them going."

The company's chairman, Abdelwanis Saad, a petroleum engineer appointed by the NOC, was forced to step down.

Mr Saad, standing dressed in a dark blue Agoco rain jacket outside the front gate of his villa in an upmarket neighbourhood known as Dollarat, or Dollars, said he was pushed aside because the workers "want to separate from the NOC and I was representing it".

Three men who worked at Agoco were killed during the uprising. Two of them were shot dead, and one, Mahdi Ziu, a 49-year-old bespectacled man whose picture now adorns every door of the company headquarters, drove a car on February 18 loaded with four propane tanks and makeshift explosives into the gates of a military base.

Mr Ziu rammed the imposing gates, blowing them into a twisted pile of concrete and rebar, dying in the blast, in what his peers considered a defining moment in the battle for the city.

* With additional reporting from Associated Press, Agence France-Press

foreigndesk@thenational.ae