Libya congress to hear committee proposals on oil deadlock

Reuters

By Suleiman Al-Khalidi, Julia Payne and Lin Noueihed

TRIPOLI/LONDON (Reuters) - The crisis committee tasked with resolving Libya's oil paralysis will brief the 200-member General National Congress by Wednesday with proposals on how to end the confrontation, the head of the government energy committee said on Monday.

No deal has yet been reached between Libya's government and tribal mediators and various protest groups who have paralysed its oil production since end July, Saad Bin Sharada told Reuters.

"Until now there is no deal to open any oilfield and they (protesters) are still negotiating their demands with local councils and mediators," Sharada told Reuters.

Last week, Libya's oil output hit a post-war low of just 150,000 barrels per day compared to its capacity of 1.6 million bpd. Exports have fallen to just 80,000 bpd from just two offshore platforms.

Trading and shipping sources said the situation had not changed since the end of last week. Only one port in eastern Libya was operational but any crude exports are earmarked for the 120,000 barrel per day (bpd) Zawiya refinery.

The protesters blocking the various fields represent a myriad of demands ranging from pay, management issues as well as calls for greater regional autonomy, which complicates the negotiations.

Some Libyan officials were optimistic of improvement in the next few days but traders remained sceptical after several false starts.

"I am hopeful production will resume soon and I expect the valves of El Feel and El Sharara fields to open in the next few days," one high level Libyan oil official said, adding production was still less than 250,000 bpd.

An armed group blocked the pipeline linking the major El Feel and El Sharara fields to the ports of Mellitah and Zawiya two weeks ago. They have a combined capacity of around 500,000 bpd.

"They say 1 or 2 days it will go back to normal, but I do not believe it. I hear the same stories all the time. Maybe it's coming back, we'll see in a few days," one of the sources said.

LASTING SOLUTION UNLIKELY FOR UNIONS

Libya's oil and gas workers union said oilfields belonging to Arabian Gulf Oil Co (AGOCO) remained closed and would not reopen until the government had met their demand for the reinstatement of the previous board.

AGOCO has a production capacity of some 425,000 bpd and its oil feeds the north African country's largest refinery.

Saad Fahri, deputy head of the union, said that even if the government reached a settlement with the Petroleum Facilities Guards (PFG) to reopen Libyan oil export terminals, workers could mount a new strike at the ports to pressure the government into meeting their demands for improved pay and conditions.

"We need a deal that resolves the root of the problem," Fahri told Reuters. "Otherwise we could mount new strikes."

Ibrahim al-Jathran was a regional head of the PFG when he decided to lead a blockade of the country's two largest oil export terminals at Es Sider and Ras Lanuf.

Farhi blamed the government for the crisis, warning that it would only worsen if it did not try to reach a settlement that satisfied the workers as well as the PFG and local residents.

"Unfortunately, the government has been very slow to negotiate and has not responded to our demands, " he added.

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