Friday, July 22, 2016

Protests over salaries close down Al-Hariga port in Tobruk Libya

The protesters, affiliated with the Petroleum Facilities Guard (PFG) shut Al-Hariga port down in Tobruk because of delays in being paid.

Spokesperson for the new unified National Oil Company (NOC) Mohammed Al-Harari claimed the protesters were no more than 30 people in all. They came from Tobruk on Wednesday, and shut down the port stopping all export of oil. Al Harari said: “We are doing some effort to solve this problem, some elders from Tobruk and some officials from Al-Khaleej Al-Arabi Oil Company are trying to reopen the oil port so that they avoid the country a possible economic melt-down.” Al-Harari indicated there were already two ships waiting to be loaded. Libyan export firms could be subject to huge fines.
Al-Harari concluded:“Libya’s oil exportation is almost at 220 bpd and shutting down Al-Hariga oil port could diminish the output into its half, not to mention that it will affect Tobruk refinery station as crude oil will stop to be pumped into it.” Just before the revolution against Gadaffi, production was at 1.6 million barrels a day. The Al-Hariga port has an export capacity of about 120,000 barrels per day.
At the beginning of July, the two rival Libyan National Oil Companies, the one based in Tripoli and associated with the UN-backed Government of National Accord (GNA) and the other in Bayda, associated with the government of the House of Representatives(HoR) agreed to merge. Many were optimistic that production would soon increase significantly. Positive talks were held with Ibrahim Jodhran, head of the Petroleum Facilities Guard, at the two ports of Es Sider and Ras Lanuf. Jodhran accepts the GNA
Helma Croft of RBC Capital Markets said: "While [the Jathran news] has led to speculation that the country’s output could quickly increase, historical evidence leads us to be more cautious. Jathran’s pledge of loyalty to the GNA government has led to speculation that the country's output could quickly double from around 350 kb/d. It should be noted that Jathran has made similar promises in the past, only to change his mind."
Even more troubling is that the agreement has not been accepted by the HoR government, with PM Al-Thani demanding that the HoR receive 40 percent of oil revenue. He made other demands as well including moving the headquarters of the NOC from Tripoli to Benghazi. This was agreed to as part of the original agreement.
A BMI research team noted: While we are more constructive on the prospects for a reopening of the ports, we expect the process to be relatively slow. Technical constraints will be significant, with large-scale maintenance works required to prepare the ports for commissioning. It is probable that substantial damage to infrastructure has been incurred and this — alongside the stop-start nature of Libya's production — will likely weigh on growth."
The situation is further complicated by the fact that many different groups have control of oil fields or of pipelines coming from the oil fields and they are able to prevent oil from reaching export terminals. While Libya is anxious to export oil to help an ailing economy it appears unlikely that production and export increases dramatically unless there is more agreement among those who have control over production.