Libya's PM warns may sink oil tankers nearing east ports

By Ulf Laessing and Ghaith Shennib TRIPOLI (Reuters) - Libyan Prime Minister Ali Zeidan warned oil tankers to stay away from eastern terminals seized by armed protesters or they could be sunk, as a confrontation over control of Libya's crude escalated. The warning came on Wednesday after Libya's navy fired warning shots at the weekend to ward off a tanker that the state-run National Oil Corp. (NOC) said had attempted to load crude at one port that has been out of government control for six months. Negotiations to end the protests have failed as eastern federalists, seeking more autonomy from Zeidan's government in Tripoli, have threatened to ship oil independently to world markets. Protesters on Tuesday said they would guarantee security for vessels docking at the three eastern ports that they have held since summer, inviting foreign tankers to load crude and bypass government control. "Any country or company or gang trying to send tankers to take oil from the seized ports without coordinating with the NOC, we will deal with them, even if we are forced to destroy or sink them," Zeidan said. "We warn all countries there will be no leniency." The confrontation is a major challenge facing the OPEC member's fragile government two years after the fall of Muammar Gaddafi. Former rebels, militias and tribesman have all resorted to force to make demands on a state that is still mapping out its new democracy. In the east, the self-proclaimed Cyrenaica regional government and its armed protesters have taken over three ports: Ras Lanuf, Es Sider and Zueitina, which previously accounted for 600,000 bpd in crude exports. Zeidan also said he could reshuffle his cabinet this week or next in a bid to counter critics, who are pursuing a parliamentary vote of no-confidence against him amid Libya's mounting disorder.