VOL. 35 | NO. 13 | Friday, April 1, 2011
National Business
Libya blames Britain for oil field attack
TRIPOLI, Libya (AP) — Libya blamed Britain for attacks on the country's largest oil field, saying the strike killed three workers and countering rebel claims that government forces were behind the attacks that have shut down production in the east. Meanwhile, a Liberian flagged tanker left the eastern port of Tobruk, en route to Singapore, oil and shipping officials said Thursday.
The Equator, which can transport up to 1 million barrels of oil, carried the first crude cargo to be sold from the east since Qatar agreed to market crude for the rebels. Its departure marked a milestone for the officials in Benghazi who have been steadily courting the international community in a bid to win firmer backing from the world community in their fight against Libyan leader Moammar Gadhafi.
But their hopes for continued exports, at least in the short-term, were dealt a blow after attacks on the 12 billion barrel Sarir field, the country's largest, and the 3 billion barrels Messla field, forced a halt in production, according to the rebels. They placed the blame on Gadhafi's supporters, citing three days of attacks on the fields. Libya, however, denied it was behind the attacks.
Deputy Foreign Minister Khaled Kaim, however, told reporters late Wednesday that "British war planes" struck Sarir, killing three guards and wounded other workers while also damaging field equipment and an oil pipeline. He did not say how many workers were wounded. He also did not say why he specified Britain, which is part of a NATO effort.
"It is aggression against the infrastructure of (the) oil industry in Libya," said Kaim, adding that "all oil facilities in Libya are secured by guards ... and they are quasi-military, like private companies."
"They are armed lightly," he said. "Our forces didn't attack any oil fields."
Earlier Wednesday, rebel spokesman Abdel-Hafidh Ghoga said armored vehicles attacked Messla on Monday and Tuesday, and then, on Wednesday, struck Sarir. The two fields are in the massive Sirte Basin region, which holds roughly 80 percent of Libya's 46.4 billion in proven reserves of conventional crude oil.
The extent of the damage was not immediately clear, but Ghoga said the rebels would not be able to sustain the 100,000 barrels per day they had been producing for the past few weeks. He said the rebels have about 1 million barrels in storage.
That output was a fraction of Libya's pre-crisis production of around 1.6 million barrels per day, and the disruption in supply has panicked international oil markets, pushing the London-based Brent futures contract to roughly $122 per barrel while the U.S. benchmark crude futures contract was hovering near $109 per barrel early Thursday.
While there is plenty of speculation that Qatar had a role in arranging the shipment, there is no clear ties to the Gulf nation.
A Persian Gulf-based industry source said it was doubtful that Qatar had played a role in the sale of the latest cargo, noting that the deal was "done with a European trader." Other oil officials had earlier said the cargo was picked up by Geneva-based oil trader Vitol SA.
Michelle Wiese Bockmann, markets editor for shipping publication Lloyd's List in London, said satellite data make clear the tanker was loaded while in Tobruk. She said it is headed for Singapore, a destination which the Gulf-based industry source also confirmed.
"There is so much cloak and daggers surrounding this shipment, it's unbelievable," she said.
For example, the shipping rate hasn't been disclosed, and at least two separate "fixtures" — which provide details of the shipment — have been circulated, she said. One incorrect fixture indicated the Equator wouldn't be sailing until April 21.
"There are extreme commercial sensitivities attached to this shipment," she said. "The tanker owner won't confirm the shipment. Vitol won't confirm the shipment," she added.
The Gulf-based oil executive said the oil may either be processed in a refinery in Singapore, or may be taken to China.
He said that the Qataris were positioned to help the rebels place their oil in Asia, a region where Qatar has more experience. But with most Libyan crude typically placed in Europe, "the Qataris have no exposure to the European market, so I'm not sure what they're bringing to the table."
Kaim, the deputy foreign minister, said that "Qatari elements were controlling the port in Tobruk" as part of a deal with the rebels and the Gulf state's government. The claim could not be substantiated, but Qatar has agreed to market oil from the rebel-held east, in a deal that would give the Benghazi-based officials access to some sorely-needed cash.
Wiese Bockmann said the fact that a tanker was able to get in to Libya and load the oil was important.
"It's quite significant because it shows that if you can find a buyer for your oil, there's a tanker that's prepared to ship it," she said.