Libya oil strikers have federalist agenda - minister

TRIPOLI Tue Aug 27, 2013 4:14pm BST

Libya's Oil Minister Abdelbari al-Arusi speaks during a joint news conference with Prime Minister Ali Zeidan at the Prime Minister's Office in Tripoli July 31, 2013. REUTERS/Ismail Zitouny

Libya's Oil Minister Abdelbari al-Arusi speaks during a joint news conference with Prime Minister Ali Zeidan at the Prime Minister's Office in Tripoli July 31, 2013.

Credit: Reuters/Ismail Zitouny

TRIPOLI (Reuters) - Striking workers who have cut Libyan oil output by over half want more power for the country's eastern region, Oil Minister Abdelbari al-Arusi said in a television interview.

Oil production has fallen to 665,000 barrels per day (bpd) due to a month-long disruption by armed security guards that led to the closure of major export ports, down from 1.55 million bpd before Libya's 2011 civil war, he told al-Hurra channel.

Until the protests, improved oil production and higher prices had brought Libya a $3 billion revenue surplus over its target in the first half of this year, Arusi said.

Arusi said a prolonged strike could lead to a budget deficit: "If the strikes continue, we will reach very terrifying figures in losses."

He blamed mainly non-oil workers and agitators pushing for federalism in Libya for the strikes, which he said had cost the country $2 billion in lost revenues.

"These groups announced federalism and they don't recognise the government nor the general national council," he said.

"These youths possess arms now and they have force, and by force they have prevented us from exporting oil and closed the ports," he added.

The strikers had contacted tankers to load oil, Arusi said, adding that international firms keen to maintain long-term ties with Libya and their reputation had rejected those advances.

"They brought some tankers outside the state to load them with oil to transfer the financial revenue to their own private accounts," he added.

"They contacted these oil firms, who got in touch with us and (asked) us whether they should deal with them. We told them they are illegal ... and so matters are under control and oil is in safe hands.

"These international firms do not want to tarnish their reputation," he said.

Arusi rebuffed strikers' assertion that independent oil sales would prevent corrupt officials within the government from selling crude for personal gain.

They accuse the national oil company's senior administration of selling oil without using measurements of quantity.

"There are meters at every field and everything is transparent," the minister said, adding Prime Minister Ali Zeidan had set up a commission of inquiry to look into such allegations.

CLOSED PORTS

The minister said the oil ports of Es Sider, Ras Lanuf, Zueitina and Marsa al Hariga, which are in the east where most of the country's oil production lies, remained closed.

Only Marsa al Brega in the east was open. Production was mainly coming from two western and southern fields in Zawiya and Mellitah, he added.

Brega loaded its first crude oil tanker since August 9 over the weekend.

"The oil ports are completely closed. Brega was recently opened and Zueitina and Hariga are still closed. Every port has a different reason for their closure," the minister added.

He warned that a prolonged hiatus in exports would allow other producers, such as fellow OPEC member Saudi Arabia, to step in, depriving Libya of revenue and even possibly forcing it to sell oil at a discount to restore former customers.

"This has led to a loss of credibility in the international market ... Saudi Arabia has the ability to up production. Why do we deprive ourselves of these much-needed financial resources for reconstruction?"

(Reporting by Suleiman Al-Khalidi, additional reporting by Julia Payne; Editing by William Hardy and Dale Hudson)

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