Reuters reports that the leaders of the self-rule movement in eastern Libya set up a regional independent oil company to handle its sales in crude oil via captured ports. Citing Abd-Rabbo Al-Barassi, the Prime Minister of Cyrenaica’s autonomous government, the new firm will be temporarily based in the Mediterranean port city of Tobruk. Al-Barassi added that the newly founded company called Libya Oil and Gas Corporation is supposed to strike energy deals with foreign companies. Besides, the shadow government is going to take the vast oil fields in the other two key regions Tripoli and Fezzan as hostage challenging the central government’s revenue lifeline. Later on, the oil company will be moved to Benghazi, Cyrenaica’s regional capital.
The announcement was made alive on the nationwide television. In the meantime, advocates of the self-rule in the east are expecting a response from Tripoli and Fezzan hoping for their “understanding”.
In the current situation, economists and oil insiders state that it will be difficult to search for oil buyers because of too high risks involved. The announcement is considered as a blow to efforts by Prime Minister Ali Zeidan to reopen oil ports and fields captured by rebels. In his turn, Zeidan issued an ultimatum deadline: lift the siege of oil and gas facilities within ten days or face action.
At present, Libya’s government may find it difficult to cover its budget expenditure from next month. Ali Zeidan says that the budget is based on the assumption that oil revenues flow for the full year. However, due to the rebels’ clashes, Italy’s company Eni stopped paying against current invoices. Moreover, in case the supplies are suspended indefinitely, the Italians will be searching for oil suppliers from other countries.
Earlier, the rioters from the Berber tribes (belonging to the native population that existed before the Muslim conquest) halted the oil export delivery from Mellitah port situated 100 km west of Tripoli. The Berber people declare themselves as a separate ethnic group and claim political rights.
Libya’s regions have been striking for self-ruling over the last two years. Such state of affairs has turned up after toppling Muammar Qaddafi in 2011. The civil war in Libya that caused the revolutionary regime change broke out exactly in Cyrenaica.
