June 14, 2018 / 10:55 AM / 7 days ago

Attack shuts major Libyan oil ports, slashing production

BENGHAZI, Libya/LONDON (Reuters) - The major Libyan oil ports of Ras Lanuf and Es Sider were closed and evacuated on Thursday after armed brigades opposed to the powerful eastern commander Khalifa Haftar stormed them, causing a production loss of 240,000 barrels per day (bpd).

FILE PHOTO: Libya's eastern-based commander Khalifa Haftar attends General Security conference, in Benghazi, Libya, October 14, 2017. REUTERS/Esam Omran Al-Fetori/File Photo

At least one storage tank at Ras Lanuf terminal was set alight following the early morning attack, an engineer told Reuters. Libya’s National Oil Corporation (NOC) declared force majeure on loadings from both terminals.

The clashes between forces loyal to Haftar’s Libyan National Army (LNA) and rival armed groups continued throughout the day south of Ras Lanuf, where the LNA was targeting its opponents with air strikes, local sources said.

Military sources said the LNA had withdrawn from both ports.

The LNA took control of Es Sider and Ras Lanuf along with other oil ports in Libya’s oil crescent in 2016, allowing them to reopen after a long blockade and significantly lifting Libya’s oil production.

More than half the storage tanks at both terminals were badly damaged in previous fighting and have yet to be repaired, though there have been regular loadings from Es Sider.

Libya’s National Oil Corporation (NOC) said it had evacuated all staff from the two terminals “as a precautionary measure.” The immediate production loss was around 240,000 bpd and the entry of a tanker due at Es Sider on Thursday was postponed, it said.

NOC Chairman Mustafa Sanalla said the output loss was expected to rise to 400,000 bpd if the shutdown continued, calling it a “national disaster” for oil-dependent Libya.

A military source said the three-pronged attack was launched by the Benghazi Defence Brigades (BDB), a group that has previously tried to take the oil crescent and advance on Benghazi, which has been fully controlled by Haftar since late last year.

The NOC blamed Ibrahim Jathran, who headed an armed group that blockaded oil crescent terminals for three years before being forced out by the LNA, and who appeared in a video posted on social media on Thursday announcing the start of a campaign.

“We announce the preparation of our ground forces and supporting forces in the oil region, and our objective is to overturn the injustice for our people over the past two years,” he said, standing in a camouflage jacket in an unidentified desert area.

“The past two years have been catastrophic for people in the oil crescent because of the presence of the system of injustice which is the other face of terrorism and extremism.”

BILLIONS LOST

The NOC says Jathran’s previous blockades cost Libya tens of billions of dollars in lost revenue. He is sought by judicial authorities in Tripoli for the blockades and attempts to export oil independently.

Repeated previous attempts by the LNA’s opponents to retake the oil crescent have failed, and it is unclear how much military and local, tribal support Jathran or BDB forces currently have.

However, the LNA, which is the dominant force in eastern Libya and rejects an internationally recognised government in the capital, Tripoli, stirred some resentment with arrests when it moved into the oil crescent in 2016, and has recently been stretched thin.

Since last month it has been waging a campaign to take control of Derna, the last city in the east to elude its control.

France, which hosted an international summit last month to set a roadmap for elections in Libya, said it “condemned with the utmost firmness the offensive conducted today by extremist elements in the oil crescent”.

Thursday’s clashes were not affecting any oilfields, the military source said. The LNA had at least five men killed and around six wounded, he said.

A local resident said he had heard the sound of heavy clashes and air strikes at dawn and had seen a large fire at the Ras Lanuf tank farm.

Crude exports from Ras Lanuf stood at 110,000 bpd in May, while exports from Es Sider were around 300,000 bpd, according to oil analytics company Vortexa.

The Minerva Lisa oil tanker, which was due to arrive at Es Sider to load a crude cargo on Thursday, was advised to stay outside the port, a source familiar with the matter said.

The tanker, chartered by trader Petraco, was seen turning away from the port on Thursday morning without loading, according to Reuters ship tracking.

A second tanker, the Seascout, is expected to arrive at the port on June 18.

Libya’s oil production recovered last year to just over 1 million bpd and has been mostly stable, though it remains vulnerable to shutdowns and blockades at oil facilities.

National output is still well under the more than 1.6 million bpd Libya was producing before a 2011 uprising led to political fragmentation and armed conflict.

Reporting by Ayman al-Warfalli, Ahmad Ghaddar, Aidan Lewis and John Irish; Writing by Aidan Lewis; Editing by Mark Potter, David Evans and Diane Craft

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