Libya’s oil industry optimistic about opening seized oil ports

Libya’s oil and gas industry association said on Tuesday it was optimistic the government would soon reach an agreement with protesters occupying major oil export ports for months.

A mix of tribesmen, militias and civil servants has seized oilfields and ports to press for political and financial demands, knocking Libya’s oil exports down to 110,000 barrels a day from more than one million in July.

Last week, the government had expected an autonomy group in eastern Libya to lift the blockage of three ports previously accounting for 600,000 bpd. But autonomy leader Ibrahim Jathran declared at the last minute that talks with Tripoli to get a greater share of oil revenues for the east had failed.

Khalid Ben Osman, chairman of the Libyan council for oil and gas, an industry body, said there were indications that a deal with Jathran could be concluded soon, possibly even within one week.

"There are positive signs," he told Reuters on the sidelines of a meeting of business leaders demanding economic reforms. "God willing, the ports will be reopened before the end of the year," he said.

Osman also said Libya had lost $10 billion in oil revenues since the blockages of fields and ports started in July.

In return for opening the ports, Jathran is demanding that corruption in the oil sector be investigated and oil sales shared between the eastern Cyrenaica region, the west and southern Fezzan.

Osman said both sides were closer than it appeared.

"Ibrahim Jathran first didn’t want to negotiate but then he actually did so and set out conditions, of which some were met, so these are positive signs," he said.

The government does not recognize Jathran’s movement but Prime Minister Ali Zeidan has said authorities had investigated claims of oil sale corruption in the past and were willing to do so again.

Jathran and other militias in the east helped topple Muammar Gaddafi in a 2011 uprising but have kept their weapons, fuelling concerns about instability in the North African country. They are campaigning for a federal power-sharing system as was in place during the kingdom preceding Gaddafi. (Reporting by Ulf Laessing; Editing by Dan Grebler)