Libya federalists announce creation of oil company

BENGHAZI, Libya // Supporters of a federal system in Libya have set up a company to sell oil from terminals they have seized in the east.

The move by the Cyrenaica Political Bureau, an autonomous group that in October set up its own government in the east, was the latest challenge to the central government in Tripoli.

“The executive bureau of Cyrenaica decided on the creation of a petrol and gas company which will have its temporary headquarters in the town of Tobruk,” the self-proclaimed government head, Abd Rabbo Al Baraassi, said late on Sunday.

Speaking at a news conference in the eastern town of Ajdabiya, Mr Al Baraassi also said a central bank would be formed for the region.

Protesters, including former rebels tasked with guarding Libya’s key installations, have blockaded the country’s main oil terminal at Zueitina, Ras Lanouf, and Al Sedra in eastern Libya since July.

The government has openly accused the guards, some of whom are calling for a federal Libya, of trying to sell crude oil.

But the strikers have accused the government of corruption in its handling of oil sales.

Since the ouster of Muammar Qaddafi in 2011, authorities have struggled to quell rising lawlessness and impose their authority.

Militias made up of rebels who fought Qaddafi have refused to lay down their arms in defiance of the government in Tripoli, carving out fiefdoms in a country awash with weapons.

Last week, the government in Tripoli said companies were trying to buy Libyan oil outside of the official channels and threatened to use force against those responsible.

The prime minister, Ali Zeidan, said on Sunday that the guards must end their blockade in 10 days, without saying how the government would enforce the deadline.

The protests have caused production to drop to around 250,000 barrels per day, compared with 1.5 million bpd before the crisis, according to the National Oil Company, causing estimated losses of US$13 billion (Dh47.71bn).

* Agence France-Presse