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Libyan state oil company suspends contracts due to strike - ASHARQ AL-AWSAT English Archive
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A cargo ship at the port of the Libyan capital Tripoli. File photo. Image by: AFP PHOTO/MAHMUD TURKIA

A cargo ship at the port of the Libyan capital Tripoli. File photo. Image by: AFP PHOTO/MAHMUD TURKIA

Tripoli, Asharq AL-Awsat—Libya was forced to suspend contractual obligations by declaring a state of force majeure on some of the oil exports on Sunday. It also admitted disruptions which have lasted for a number of weeks, which reduced exports to their lowest level since the start of the civil war in 2011.

A document issued by the Libyan National Oil Company (NOC) on Sunday said the authorities declared a state of force majeure on some of the oil exports from the ports of Zuwaitinah, Marsa Brega, Ras Lanuf and Sidr.

The document said the ports were closed due to a strike by the ports’ guards since the end of July 2013, adding that the state of force majeure was declared for that reason.

The state of force majeure is a legal procedure which allows the suspension of contractual obligations.

A spokesman of the Libyan Ministry of Oil, however, said on Monday that the Marsa Harega Port was back in full operation yesterday, and that it was ready for export operations. The export capacity of the port is 110,000 barrels per day, but was suspended for three weeks due to the strike by workers of the Arabian Gulf Oil Company (Agoco), which operates the port. Only a few shipments of local consumption fuel were allowed out in that period.

The pay-related strikes and other protests at the two largest ports in Libya and at oil fields caused a drop in the production and export of crude oil to the lowest levels since the toppling of Muammar Gaddafi in 2011.

A senior oil official said Idris Abu Khamadah, who took charge of security at oil installations since August 1, in place of Rashid Al-Saberi, was instrumental in restoring port operations. The official told Reuters that “he [Khamadah] was successful in defusing the crisis in Tubruq and Marsa Harega, and was now working on Zuwaitinah.”

Oil installations’ security guards work under the Ministry of Defense, although only around 2,000 of a force of 15,000 workers received military training.

There are doubts within the market, however, due to the number of false reopening of other ports in the past week. A trader who owns an oil tanker which is waiting nearby, speaking on a condition of anonymity, said: “we want to see a ship dock and be loaded.”

A spokesman for the Oil installations’ security guards said Marsa Harega Port has started operating again and that some oil sector workers supported the government, including some who work in a nearby port. He added: “We received a message from workers at Brega Port in which they said they objected to the closure of the port and that they will follow government orders.”

The stand-off between the two sides reached a peak at the end of last week when the government threatened to take military action if the striking guards at Sidr Port sold oil independently from the government.

Libyan sources said the striking guards were pressured by their colleagues in other ports, and that it now appeared that they had failed to gather widespread support for the sale of oil without government approval.

The government said last week that Ibrahim Al-Jadran, chairman of the oil installations guards’ establishment, had intended to sell oil for the benefit of his striking workers. The guards’ spokesman said the Libyan army chief had relieved Jadran from his duties, and expecting work to restart in other ports.

There are currently eight tankers waiting to be loaded in Sidr Port, which remains closed, but there are indications that some oil contracts may be signed independently from the NOC. Some traders and workers said there was a mysterious tanker waiting outside the port, but that no-one knew who it belonged to. A port worker, who did not wish to be named, said: “We tried to contact the ship, but we failed to reach its captain.”

The Libyan authorities have increased their presence in the Port of Sidr. Windward Company, which specializes in shipping data analysis, said a Libyan Coastguard boat entered the Port of Sidr on Saturday.

Asharq Al-Awsat

Asharq Al-Awsat

Asharq Al-Awsat is the world’s premier pan-Arab daily newspaper, printed simultaneously each day on four continents in 14 cities. Launched in London in 1978, Asharq Al-Awsat has established itself as the decisive publication on pan-Arab and international affairs, offering its readers in-depth analysis and exclusive editorials, as well as the most comprehensive coverage of the entire Arab world.

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