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Libyan rebels' attempt to sell oil foiled by Navy SEALs

MAHER CHMAYTELLI

WASHINGTON (Bloomberg) -- The U.S. Navy thwarted the first attempt by rebels seeking self-rule in eastern Libya to export crude oil from a port they control.

Navy SEAL commandos yesterday boarded the Morning Glory, a tanker that sailed on March 11 from the Libyan port of Es Sider with a cargo of crude, the U.S. Defense Department said in an emailed statement today. The operation took place in the Mediterranean Sea southeast of the island nation of Cyprus, and the tanker will sail “soon,” with U.S. sailors on board, to a port under the Libyan government’s control, it said.

“No one was hurt tonight when U.S. forces, at the request of both the Libyan and Cypriot governments, boarded and took control of the commercial tanker Morning Glory, a stateless vessel seized earlier this month by three armed Libyans,” the Defense Department said. “The SEAL team embarked and operated from the guided missile destroyer USS Roosevelt.”

The failure of Libyan government forces to prevent the Morning Glory from sailing away triggered the parliament’s ouster of Prime Minister Ali Zaidan and his replacement with Defense Minister Abdullah Theni. Federalists in the country’s eastern Barqa region, also known by its historic name Cyrenaica, occupied four of Libya’s nine oil ports at the end of July, including Es Sider, the largest.

Libya’s central government has been hobbled by a lack of oil revenue since the ouster of Muammar Qaddafi in 2011. Crude production slumped to 350,000 bpd last month, from an average of 1.59 MMbbl in 2010. The deadlock in Libya, a member of the Organization of Petroleum Exporting Countries, has global implications, with Citigroup Inc. analysts citing it as one of the reasons they raised their 2014 forecast for Brent crude to $103 a barrel, from $93, last month.

The U.S. Navy’s intervention to stop the Morning Glory “is definitely a setback for the rebels,” said Theodore Karasik, director of research at the Dubai-based Institute for Near East and Gulf Military Analysis. “It shows the government has the backing of the international community, and it makes it more difficult for the rebels to become autonomous by selling oil,” he said today by telephone.

The political implications for Libya were less clear, Karasik said. The tanker episode could help rekindle negotiations between the central government and the eastern rebels on a formula to share oil revenue, or it could heighten tensions between them, he said.

“It could go either way,” Karasik said.

03/17/2014

 

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