Statement Issued by NOC Chairman:
Statement Issued by NOC Chairman:
The Misrata-based Libyan Ports Company has refused to relocate its headquarters from Misrata to Benghazi after being ordered to do so by the Beida-based government of Abdullah Al-Thinni.
The company, previously known as the Socialist Ports Company, said the order infringed Law No. 21 which established company in 1985 and which stated that the headquarters were in Misrata.
Last month, following lobbying from the company officials based in Benghazi, the Beida government ordered the Misrata management to transfer the company to Libya’s second city. The order said that this was to be a temporary measure.
As a result of it and its rejection by the board in Misrata, there are now two parallel port companies. The Benghazi one, recognised by the interim government as well as the Libyan National Army and the House of Representatives, is headed by Captain Tarek Al-Thabet.
Statement by NOC:
NOC Chairman Mustafa Sanalla said he had warned the head of the interim government in Beyda, Abdalla Thinni, not to use GCC-Qatar crisis as a pretext for illegal oil exports.
Sanalla said, “UN Security Council Resolutions and a slew of statements by the international community recognize NOC as the legitimate seller of oil on international markets.
As I think is obvious by now, we do not take sides in the Libyan political conflict. Our job is to protect and make the best possible use of Libya’s oil wealth, maximizing Libyan oil production and oil sales revenues for the benefit of all Libyans.” “NOC has never awarded contracts to benefit anybody but Libya,” he said. “We act in the Libyan national interest, not in the interests of foreign entities.” Sanalla said contracts signed by Nagi el-Moghrabi, appointed acting chairman of a parallel institution by Thinni, were with companies NOC would not accept as counterparties, and could cost Libya billions of dollars in lost revenue if they were ever implemented.
Sanalla warned Thinni against attempting further “irresponsible” port blockades, saying, “this will only bring further suffering to the Libyan people. It will reduce our national revenues and our ability to pay for vital commodities – fuel, food, power, medicines. It will devalue the dinar even further.
Sanalla concluded his letter by saying “We respect the Libyan National Army General Command for its responsible opposition to port blockades. It is clear they oppose Jadhran and Nagi tactics. They understand they are the path to Libya’s collapse. I hope you will take notice of their wise position on this matter.
Tripoli June13, 2017
The resurgence of Libyan oil production will offer support to Suezmax and Aframax tankers, in terms of demand, but in the short-term, prospects aren’t that rosy. In its latest weekly report, shipbroker Charles R. Weber noted that “Libyan crude production posted strong gains during May, rising from 700,000 b/d at the end of April to a three‐year high of 800,000 b/d early during May and subsequently concluding the month at 827,000 b/d, according to the country’s National Oil Company. The gains follow a restart of production at the Sahara oil field late during April after a weeks‐long closure and a restart of the El Feel (Elephant) field during May after having been offline for two years. A technical issue led to a short blip in production at the Sahara field – the country’s largest – during mid‐month likely implies that the average production rate for the month will be lower than the headline figures suggest, but directional improvements and multiple‐year highs imply a positive demand‐side development for Aframax and Suezmax tankers servicing regional cargo flows”, said the shipbroker.
Indeed, CR Weber notes that “a fresh influx of cargoes during late May proved quite supportive of Aframax rates – if only briefly. Aframax TCEs on the MED‐MED route jumped from just $10,700/day at the start of the month to over $25,500/day by May 24th. Contributing to the gains were modest supply gains from Ceyhan, as well as coverage of prompt cargo purchases of North Sea crude grades (during a brief Brent contango futures structure ahead of the OPEC production cut extension) which simultaneously propelled NSEA‐UKC Aframax TCEs to over $30,000/day. Suezmax rates in the same markets rallied in tandem as they have been trading at an effective floor dictated by Afrramaxes, with $/mt rates matching those of the smaller class. Any cheer among owners was short‐lived, however, as Aframax TCEs have largely corrected: presently, the MED‐MED route yields ~$9,776/day and the NSEA‐UKC route yields ~$11,977/day”, it said.
According to CR Weber, “the outlook for the remainder of Q2 and the start of Q3 doesn’t appear particularly rosy, despite potential for Libya to yield a steadier and elevated export flow during the coming months. Natural Aframax demand in the North Sea market is set to decline m/m during June, and the July program shows the fewest loadings of 2017. Meanwhile, Ceyhan loadings are unlikely to observe much further upside following May’s gains. Adding to prospective negative pressure, Suezmaxes appear poised for a wider supply/demand imbalance in the West Africa region, which could elevate vies by Suezmax units for Aframax cargoes. Nigeria’s Forcados crude stream is poised to return following repairs to the pipeline linking fields to the Forcados terminal. Though notionally positive for Suezmaxes (the traditional workhorse of West African exports) the return of Forcados could weaken regional crude differentials to Brent. This would make West African crude more attractive to Asian buyers seeking to offset a lack of supply growth in the Middle East due to extended OPEC production cuts with purchases elsewhere, thereby supporting VLCCs at the expense of Suezmaxes”.
The shipbroker added that “on a YTD y/y basis, VLCC demand in West Africa has grown by 28% while Suezmax demand has shrunk by 25%. Meanwhile, both the Aframax/LR2 and Suezmax fleets are grappling with extraordinarily high net fleet growth rates as a massive newbuilding delivery program is ongoing amid limited phase‐outs of older units. The Aframax/LR2 fleet is has expanded by 2.7% YTD and is projected to conclude the year with a net annual growth rate of 6.9% for 2017 while the Suezmax fleet has expanded by 5.4% YTD and is projected observe a net annual growth rate of 10.0%. Moreover, the majority of this year’s newbuildings have yet to enter the Atlantic basin. Our analysis of AIS and fixture data shows that the average Suezmax newbuilding does not appear in the West Africa market for 95 days after delivery – and of the 26 Suezmax units delivered since 1 Jan, just five have traded cargoes from West Africa so far. To put the volume of recently delivered units that have yet to enter the region into perspective, there are around 10 spot market‐serviced Suezmax loadings and 17 total Suezmax loadings in West Africa, per week”, the shipbroker concluded.
Source: HSN 6.6.2017
NOC and Wintershall signed a memorandum of understanding (MOU) on August 26, 2010, to extend Wintershall’s 50-year concession for areas NC-96 and NC-97 and to convert to EPSA IV terms, in line with other foreign operators in Libya.
In its attempt to stamp out corruption, the Central Bank of Libya (CBL) has imposed the following 5 Companies to Inspect all goods traded with Libya: Lloyds, Bureau Veritas, DNV-GL, GQS (Global Quality and Services) & GITO (General Inspection Technical Office)
Attached is the Official Circular (In Arabic only).
A report by Jason Pack of the US-Libya Business Association (USLBA) – Washington DC, 21 April 2017.
Click the following link for the full report: Liquidity-Crunch-in-Libya-report-USLBA-210417-LH
NB: Publishing this report for general information does not mean endorsement by Libyan Lines.