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Libya Says U.S.-Backed Talks Could Soon End Oil Blockade

Bloomberg logo Bloomberg 4 days ago Salma El Wardany and Tarek El-Tablawy

(Bloomberg) -- Tribes in eastern Libya announced they would allow oil production from fields they control to start again, shortly after the state energy company said negotiations between the U.S. and regional governments could lead to a resumption of exports from the war-battered OPEC member.

The tribes, which shut down most energy facilities in the east in January, will also allow rebel commander Khalifa Haftar’s Libyan National Army to negotiate with the United Nations over the distribution of oil revenue, Ibrahim Bouhreba al-Baraassi, a member of one of the groups, told Bloomberg.

The announcement came after the state-run National Oil Corp. said it was in talks with Libya’s UN-recognized government in Tripoli, the U.S. and some Middle Eastern powers. The NOC and Washington have called on supporters of Haftar, who’s backed in Libya’s civil war by Egypt, Russia and the United Arab Emirates, to end their blockade of the nation’s oil ports and fields.

“We are hopeful that those regional countries will lift the blockade and allow us to resume our work for the benefit of all the Libyan people,” the NOC said, without identifying the nations. An agreement should “protect the oil facilities and make sure they are never used as a military target or a political bargaining chip again.”

READ: Revival of Libya’s War-Torn Oil Industry to Be Slow and Costly

Libya’s exports have plummeted to less than 100,000 barrels a day from 1.1 million because of the shut downs. The NOC has said that neglect and damage from the conflict, which began in 2011 after the ouster of former leader Moammar Qaddafi, means it will cost hundreds of millions of dollars to restore output fully.

a close up of a map: Libya’s Oil and Gas Network © Bloomberg Libya’s Oil and Gas Network

Haftar, who’s based in the east, launched a western offensive and was close to taking the capital, Tripoli, earlier this year, which would have effectively given him control of the country. Turkey intervened on behalf of the Tripoli government of Fayez al-Sarraj and pushed Haftar’s forces back toward Sirte. The two sides are poised to square off in the central city close to Libya’s “oil crescent” -- where some of its largest fields and export terminals lie.

The NOC said on Friday that Russian and other mercenaries had entered the western oil field of Sharara, the nation’s biggest, to prevent production from restarting.

“Many oil producing countries are benefiting from the ongoing oil blockade and are taking advantage of the absence of the Libyan oil from global markets,” Mustafa Sanalla, the NOC’s chairman, said in a separate statement following a meeting with the European Union’s ambassador to the country.

(Updates throughout with details of tribes’ announcement.)

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