Libyan rebels say two oil ports reopened after yearlong blockade

Rebels who helped decimate Libyan oil production by blockading eastern ports said the nation’s largest and third-largest export facilities can ship crude again, in a gesture of support for the newly elected parliament.

Es Sider and Ras Lanuf, which have combined capacity of 560,000 bpd, will reopen today, July 2, according to Ali Al-Hasy, a spokesman for the rebels’ Executive Office for Barqa. Libya’s state-run National Oil Corp. hasn’t been informed of the move, said Mohamed Elharari, company spokesman. The two terminals would increase Libya’s crude-export capacity almost five-fold.

The loss of Libya’s oil production boosted the price of Brent, a benchmark for half the world’s traded crude. Brent futures for August settlement fell as much as 0.7% to $111.54 a barrel today, the lowest intraday level in almost three weeks. The restart of operations at the two ports would probably send Brent down to $110 a barrel, Commerzbank AG said.

“The Petroleum Facilities Guards in Es Sider and Ras Lanuf have been instructed to allow the two ports to resume operations,” Al-Hasy said by phone from eastern Libya. “This is an initiative from the Executive Office for Barqa to welcome the newly elected parliament that includes well-known patriots, and to encourage them to fight corruption and protect the natural resources of the nation.”

The self-declared Executive Office for Barqa seeks self-rule for the eastern region of Libya known also as Cyrenaica. It occupied oil ports in the region at the end of July 2013, demanding an oil-revenue-sharing agreement to make up for the neglect the area experienced under Muammar Qaddafi’s 42-year rule.

Brent Falls

Libya is now producing about 320,000 bpd, or about a fifth of its output before Qaddafi was overthrown in 2011, according to state-run National Oil Corp. “We will lift the state of force majeure in Es Sider and Ras Lanuf when we receive confirmation of this agreement from the government,” said Elharari. Force majeure is a legal step that protects a company from liability when it can’t fulfill a contract for reasons beyond its control.

The premium of the front-month Brent contract over the second month, a structure called backwardation that signals tight near-term supplies, narrowed to as little as 7 cents a barrel on the ICE Futures Europe exchange in London today, the least since April 15. Brent’s premium to U.S. benchmark West Texas Intermediate narrowed as much as 41 cents to $6.54 a barrel on ICE.

Government representatives including Justice Minister Salah al-Mirghani and a delegation of the Barqa federalists sealed the agreement yesterday in the eastern city of Tobruk, Al-Hasy said. “The facilities in Es Sider and Ras Lanuf are in very good shape, they are ready to operate.”

‘Ready to Operate’

Es Sider has 340,000 bbl in daily loading capacity and Ras Lanuf 220,000 bbl, according to the oil ministry. The nation has a total of nine oil export terminals, of which three - Brega, Jurf and Bouri - are operating with a combined daily loading capacity of 145,000 bbl.

While the other terminals - Zawiya, Mellitah, Hariga and Zueitina - are under government control, they are not exporting because of protests at the ports or connected oilfields unrelated to those of the Barqa federalists.

The government has agreed to pay “in the next few days” the salaries of Petroleum Facilities Guard who defected to the Barqa group during the blockade and to implement a preliminary agreement reached on April 6, Al-Hasy said. The rebels handed over the oil ports of Hariga and Zueitina after this accord in exchange for amnesty and salary payments for the guards, and an audit of the National Oil Corp.’s oil sales since the overthrow of Qaddafi.

The Barqa federalists in May threatened to re-occupy Hariga and Zueitina in protest over the appointment as prime minister of Ahmed Maiteg, whom they see as allied with the nation’s Islamists. His appointment was later withdrawn, and elections were held last week for a new parliament.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By Giftelyon Multi-Sevices Int'l Ltd and services, UK, online.

Lukoil, NewAge farm into Bowleven’s Cameroon offshore block

Bowleven, an Africa focused oil and gas exploration group, has delivered its strategic intent to sell part of its interest in the Etinde Permit, offshore Cameroon, by entering into a conditional agreement with Lukoil and NewAge.

Bowleven will reduce its interest in the Etinde permit from 75% to 25% and receive aggregate consideration of approximately $250 million comprising a $170 million cash payment at completion; a $40 million staged deferred cash payment due at Etinde development project FID and on completion of appraisal drilling; and a $40 million (net) carry for two appraisal wells.

Lukoil will acquire a 37.5% interest and NewAge will acquire an additional 12.5% interest in the Etinde Permit to increase its group holding from 25% to 37.5%. Camop, a wholly-owned subsidiary of NewAge, will become operator of the Etinde Permit following completion, allowing Bowleven to focus on its proven exploration skillset.

Bowleven will retain a 25% interest in the Etinde Permit, ensuring continued exposure to the considerable resource and future development potential of the acreage.

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By Giftelyon Multi-Sevices Int'l Ltd and services, UK, online.

Marsol International grows in partnership with RMA

Marsol International, a UAE-based global marine solutions provider focused on the offshore oil terminal market and related infrastructure, has entered into a partnership with RMA Engineering Solutions (RMAES) to support its international growth strategy.

RMAES is a member of the RMA Group, a diversified American-owned company headquartered in Bangkok, Thailand.  RMA specializes in providing innovative infrastructure, automotive and engineering solutions to clients in the emerging markets of Asia, Africa, and the Middle East, often in extremely challenging frontier environments.  The company has approximately $1 billion in annual revenues with offices on the ground in 21 counties.

RMA’s global breadth and support via development and investment funding will enable Marsol to deliver its solutions to a greater service level and a wider customer base.  It will also allow Marsol to pursue international growth through its ability to train local resources to take their place in the operation and maintenance of the facilities and related equipment.

Since 2005, Marsol International has provided operational engineering and management solutions to clients, consultants and EPC contractors for new offshore facilities, and operational and IRM services for existing facilities to offshore terminal owners and operators. 

Mike Young, managing director of Marsol International, said: “Marsol International has always employed a holistic approach to growing our business. We understand that the key to developing emerging markets is to train local people to an internationally accepted level, whereby empowering them to manage their own resources.

“Marsol International adds value by managing this process. From the concept and design stage, through to installation and operation, we work closely with clients to understand their requirements to ensure their needs are met by a fully operational solution with minimal modifications. Taking ownership of this process and training local staff to operate the field on a day-to-day basis is key to this integrated approach.”

Providing useful resources, articles and writings on crude oil, other petroleum products, energy and gas. By Giftelyon Multi-Sevices Int'l Ltd and services, UK, online.

EIA expects U.S. natural gas prices to stay high through the winter

In its October Short-Term Energy Outlook, the U.S. Energy Information Administration forecasts that natural gas spot prices at the U.S. benchmark Henry Hub will see the highest average winter price since 2007–2008. More »

Russia decides not to increase natural gas shipments to Europe

Russia is keeping a tight grip on Europe’s energy market, opting against sending more natural gas to the continent even after President Vladimir Putin said he was prepared to boost supplies. More »