Libya to resume normal oil production as groups agree to lift blockades

Move could help to restore an estimated 850,000 barrels per day of output

Farhat Bengdara, centre, chief of Libya's National Oil Corporation, announced the lifting of the blockade after meeting tribal elders in Benghazi. AFP

Libya has resumed oil production and exports at all its blockaded oilfields and ports, the Tripoli government's newly installed head of the National Oil Corporation has said.

Farhat Bengdara's announcement came after he met in the eastern city of Benghazi with tribal elders representing the groups involved in the blockade, which has lasted for months.

The lifting of the obstructions could restore an estimated 850,000 barrels per day of Libyan oil output.

"The oil tanker IBELA, which carries the Italian flag, is now entering to load and export a shipment through the Brega oil terminal," the NOC said in a statement on twitter.

Production had collapsed from one million barrels per day in March to fewer than 200,000 bpd, according to one estimate.

Blockades of oilfields and export terminal blockades — often by politically controlled militias and tribal groups — have been a frequent occurrence in Libya since a Nato-led intervention toppled dictator Muammar Qaddafi in 2011.

Armed factions have sought to control production and exports, in some cases attacking oil infrastructure. This has devastated Libya's economy.

Last week, the Central Bank of Libya said the country had lost more than $3.5 billion in oil revenue due to the blockade.

“The National Oil Corporation announces the lifting of force majeure at all fields and terminals from July 15,” Mr Bengdara said in Benghazi, after the meeting on Friday.

Force majeure is a legal measure allowing companies to free themselves from contractual obligations in light of circumstances beyond their control.

Mr Bengdara was speaking during an event attended by representatives of groups who had since mid-April blockaded six oilfields and export terminals over demands for a more “equitable distribution” of the country's oil revenue.

Libya’s oil ministry warned last month that production was on the verge of collapsing to 100,000 bpd, although independent observers said this was unlikely.

The shutdowns have nonetheless cost the country hundreds of thousands of barrels per day in lost output at a time of soaring oil prices.

The blockade was imposed by groups allied with Libya's House of Representatives parliament — one of the country's two rival power centres — based in the east.

Prime Minister Abdul Hamid Dbeibah, head of the interim Government of National Unity based in Tripoli, appointed Mr Bengdara as NOC chairman on Tuesday.

Struggle over National Oil Corporation

The decision was challenged by Mustafa Sanalla, who had held the post from 2014 until his dismissal.

Mr Bengdara was only able to enter the NOC headquarters on Thursday, after an armed force was sent there. The NOC board of governors said in a statement on Facebook on Sunday that its offices were still surrounded by an armed group and that it will "not comply with any "illegal" sacking measures from an "outgoing" government.

Mr Sanalla, who had been increasingly at odds with Tripoli Oil Minister Mohamed Oun, had been widely praised for limiting political interference in the country’s vital oil sector.

US ambassador to Libya Richard Norland expressed “deep concern” at the removal of Mr Sanalla.

Mr Norland said the NOC “has remained politically independent and technically competent under the leadership of Mustafa Sanalla”.

Upon taking up his new position, Mr Bengdara, a former central banker, said “the oil sector has fallen prey to political struggles, but we will work to prevent political interference in the sector”.

His appointment was rejected by the House of Representatives, which considers Mr Dbeibah's mandate to have ended after national elections that his government was appointed to oversee were not held in December as scheduled. This followed disputes over the electoral process.

The parliament appointed a new government led by former foreign minister Fathi Bashagha in March, but Mr Dbeibah has said his government will not step down until elections are held.

Mr Dbeibah's sacking of Mr Sanalla has further raised tensions in the country that threaten to derail international efforts to end more than 10 years of political turmoil and conflict.

Libyan political delegates met in the Republic of the Congo's capital Brazzaville on Thursday and Friday in preparation for reconciliation talks aimed at holding elections.

Representatives of the Libyan parliament, a presidential council appointed under UN auspices and Saif Al Islam Qaddafi, the former dictator's eldest son, attended the meeting.