UN sanctions don't ban Libyan rebel oil: envoys

Reuters, Tuesday 29 Mar 2011

Sales through non-Gaddafi companies legal but analysts question east's current export capability

Libyan rebels stand guard at oil terminal (Photo: AP)

UN sanctions on Libya do not bar anti-government rebels from exporting Libyan oil as long as they bypass firms linked to leader Muammar Gaddafi, UN diplomats said on Monday.

"There is no UN embargo on Libyan oil," a UN Security Council diplomat told Reuters on condition of anonymity. "The rebels can sell oil. But they can't do it through the Libyan National Oil Corporation."

No special permission would be needed from the Security Council's Libya sanctions committee, which oversees compliance with the sanctions, for the rebels to sell oil, envoys said.

UN Security Council resolutions 1970 and 1973 slapped sanctions on Gaddafi, his family and inner circle, the Libyan National Oil Corporation, the central bank and other Libyan firms linked to Gaddafi.

For individuals, the sanctions take the form of travel bans and asset freezes. For firms, all of their assets abroad are to be frozen and countries are forbidden from engaging in any transactions with them.

"As long as a company's not on the list, it's not sanctioned, and it can do business," a diplomat said.

A senior Libyan rebel official said on Sunday Gulf oil producer Qatar had agreed to market oil produced from east Libyan fields that are no longer under the control of Gaddafi, the country's long-time leader.

Qatar on Monday became the first Arab country to recognize Libya's rebels while a US Treasury Department official said crude oil sales by Libyan rebels would not be subject to US sanctions if they were not connected to Gaddafi's government entities.

Still, big oil importers have stayed away from Libyan oil, saying shipping and legal risks are a concern.

Another diplomat close to the Security Council's Libya sanctions committee said the panel had not yet received any notifications from any country -- including Qatar -- about plans to purchase Libyan oil. If states began buying oil from the rebels, they would likely notify the committee, he said.

UN diplomats said that while it may be theoretically possible for the rebels to export oil, it is unlikely that they would be in a position to do so anytime soon due to the precarious security situation there as forces loyal to Gaddafi struggle to crush the rebellion in the east.

"I don't think anyone takes seriously the idea that the rebels would start selling oil soon," one diplomat said.

The United States, Britain and France are among the countries that have been enforcing a UN-mandated no-fly zone over Libya and launching air strikes against Gaddafi's forces to protect civilians and help the rebels.

Officials at eastern Libyan oil company Agoco, which is not explicitly named on the UN sanctions list, have told Reuters it was pumping most of the oil produced in the rebel-held east to the terminal in Tobruk.

Agoco had said it aimed to begin marketing its oil abroad before ceding the plan to the rebel National Council. The plan seemed to have hit a stumbling block when Agoco was named along with 13 other Libyan companies targeted by US sanctions.

UN diplomats said countries would likely want to make absolutely certain that Agoco or any other rebel-held oil-exporting firm had no links to Gaddafi or the Libyan National Oil Corporation before agreeing to purchase oil from it.

One diplomat said that the UN sanctions "most likely" also apply to Agoco, which is a subsidiary of the Libyan National Oil Corp. "Not operating under Gaddafi's control does not automatically exempt them from the sanctions," he said.

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