Libyan rebel chief: No immediate new oil sales

AP, Monday 18 Apr 2011

Further exports will depend on swift repairs to two oil fields in the southern desert damaged in disputed air raids

Libyan rebels will not sell any additional oil until production resumes from two key fields that suffered battle damage in the breakaway east, the region's top oil official said Monday.

The repairs -- which rebels say could be completed in weeks -- are a priority for opposition forces that are counting on oil revenues to maintain the fight against Muammar Gaddafi's stronger military.

Wahid Bughaigis, who serves as oil minister for the rebel-held eastern swath of the country, said a main challenge was finding parts to repair damaged generators and other sites at the Messla and Sarir fields, which the rebels maintain were hit by pro-Gaddafi forces. The government, however, has blamed British warplanes for the damage -- a charge NATO had denied.

The damage includes a power generation system, one oil tank and several small diesel tanks that fueled the generators.

Asked how soon production would resume, Bughaigis said: "No, not months, certainly not. Weeks? Yes."

The two fields have a production capacity of about 400,000 barrels per day, although output has fallen to about a third of that level since the uprising against Gadhafi began more than two months ago. The pipelines feed to the port of Tobruk near the Egyptian border.

Earlier this month, the Gulf state of Qatar helped rebels complete the sale of 1 million barrels of crude that netted roughly US$120 million for the anti-Gadhafi forces. Bughaigis said the funds were deposited in an account and would be used to buy food, supplies and arms.

OPEC-member Libya sits atop Africa's largest proven oil reserves. But Libyan exports have largely disappeared from the international market since the uprising began, helping drive oil prices to their highest levels in more than two years.

Bughaigis said discussions are ongoing with potential buyers for additional crude cargos, but declined to provide details.

Logistical challenges also abound to boost oil production in rebel territory.

Foreign oil experts have fled along with about 80 percent of the labourers, Bughaigis said. But he said that rebels should be able to muster enough staff if their forces can secure the fields.

"Look at a map and the enormity of the desert," he said, adding that the fields were just "tiny spots" in the vast desert landscape.

"Really you would need an army to secure them," he added.

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