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Published: Monday January 6, 2014 MYT 10:50:02 PM
Updated: Monday January 6, 2014 MYT 10:50:02 PM

Libya says navy blocks oil tanker at mutinous eastern port

TRIPOLI (Reuters) - Libya's navy has blocked an oil tanker from illegally loading crude at an eastern port that has been held for months by armed protesters demanding more autonomy from Tripoli, officials said on Monday.

"The navy fired warning shots to show that they were serious," a Libyan National Oil Corp (NOC) official, who declined to be named, told Reuters.

Any attempt by protesters to get oil to world markets independently would be a major escalation of their blockade that has slashed Libya's vital oil exports.

"The Libyan navy... dealt on Sunday with a Malta-flagged tanker which tried entering Es-Sider port in cooperation with an illegal group to load and smuggle crude oil," NOC said in a statement. "The Libyan navy prevented the tanker from reaching Es-Sider."

The NOC said Libya had warned the owner of the ship that approaching the port was illegal and warned it would stop any tanker trying "to smuggle and steal Libyan oil illegally."

The tanker Baku was chartered by a company called Royal Asset Management, the NOC official said, but did not know any more about the company.

Reuters AIS Live ship tracking showed that the tanker was now heading north towards Malta. It had been sailing around Libya since end December and was outside Brega port and then Zawiya before heading to Es Sider.

Protest leaders, based in Ajdabiya in the east, were not immediately available for comment to confirm they had sought to load a shipment of crude.

But the eastern protesters, who demand more regional autonomy and a greater share of oil wealth, took control of three key ports six months ago, and have repeatedly threatened to sell crude independently.

Tripoli had countered it may use force to stop protesters shipping crude, but analysts believed it would be difficult for the group to find clients willing to risk buying oil that bypasses Libya's central government.

COMPLEX CONFRONTATIONS

Two years after the fall of Muammar Gaddafi, the eastern oil standoff is just one of the complex confrontations facing Libya's weak central government, which has struggled to contain rival militias and former rebels who once fought the dictator.

With Libya's political transition to democracy still fragile, many former rebel fighters refuse to give up their weapons and often turn to military muscle to make demands.

The heavily-armed group, calling for autonomy and a greater share of oil sales, is occupying the eastern Ras Lanuf, Es-Sider and Zuweitina ports, which previously accounted for 600,000 barrels a day of oil exports.

NOC extended on Saturday force majeure for the ports, a legal term to cover the suspension of contract obligations.

Prime Minister Ali Zeidan said last month tribal elders would hold more talks with the group led by Ibrahim Jathran, a hero from the 2011 uprising, but there has been so sign of any progress.

Over the weekend, OPEC-member Libya restarted oil production at the El Sharara field after another group of protesters ended a two-month blockade there, NOC said on Sunday, raising prospect of new oil revenues.

The field should reach full capacity of 340,000 barrels per day by Tuesday, NOC spokesman Mohamed al-Harari said.

The resumption of the southern field could lift output to 600,000 bpd. Total Libyan output had fallen to 250,000 bpd from 1.4 million bpd in July.

Zeidan has said the government will act against the oil strikers, but Libya's nascent army, which is still in training, is too weak to tackle armed protesters who are have a strong military presence at the ports.

(Additional reporting by Julia Payne in London, editing by Patrick Markey and William Hardy)

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