Libya says it will sue over oil

The Libyan governemnt has warned foreign companies not to do business with organisations connected to the rebels fighting for independence in the country

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Libya threatened to sue any foreign companies that sign energy deals with the rebels fighting to bring down the government, the state news agency Jana reported.

"The National Oil Corporation … is the entity authorised by law to deal with external parties," the government said in a communique. "The Libyan state will sue any party that seals deals regarding Libyan oil with parties other than the National Oil Corporation."

Last week, the Transitional National Council, a group formed by the opposition to establish a quasi-governmental structure, set up a parallel Libyan "national oil company" and "central bank" based in Benghazi. In time, those organisations might perform such functions as handling sales of oil from rebel-held fields independently of Tripoli, analysts said.

A number of unconfirmed news reports this week suggested that Qatar was willing to market oil on behalf of the rebel council.

"While it will remain a challenge to restart production as long as Libyan violence continues and the physical control and security of upstream assets remains unclear, the willingness of the United States and Qatar to assist the rebels is important," said Samuel Ciszuk, the senior Middle East analyst at IHS Energy.

Signals that the US Treasury department would exempt rebel-controlled Libyan oil exports from sanctions were "very good news for the opposition movement", which might otherwise face a long bureaucratic battle to have sanctions lifted, in addition to what could be a long drawn-out military campaign, Mr Ciszuk said.

He said the reports that Qatar was willing to let the state-owned Qatar Petroleum market crude from the eastern Libyan oil port of Marsa El Harigh were also encouraging. "It removes most of the remaining legal fears that oil traders and oil companies have in dealing with new entities controlled or created by the rebels," Mr Ciszuk said.

The Marsa El Harigh oil port on the outskirts of Tobruk in the north-east corner of Libya yesterday remained under rebel control. Nevertheless, oil refiners that previously purchased high-quality light, sweet crude from Libya have been lining up alternative supplies.