Libyan rebels say control oil fields, honour deals

* Rebels say control key oil fields

* Rebels pledge to honour oil deals, if they are fair

* Oil production, work at terminals seen down by 75 percent

By Tom Pfeiffer

BENGHAZI, Libya, Feb 25 (Reuters) - Rebels in eastern Libya said on Friday they now controlled most of the oil fields east of the town of Ras Lanuf, and said they would honour oil deals as long as they were in the interest of the people. [ID:nLDE71M1AF]

The eastern Libyan town of Brega and its oil terminal are under rebel control, and soldiers who have defected are helping the rebels to secure the port, Reuters witnesses said on Friday.

"This area is controlled by the people," said Mabrook Maghraby, a lawyer from Benghazi who is now involved with the local committees defending Brega.

If oil contracts were unfair or based on corruption, however, the interim leadership of Libya's second city Benghazi said they reserved the right to renegotiate them.

Many of Libya's key oil producing areas and terminals are located in the east of the OPEC member state, large chunks of which have fallen to rebels seeking to oust veteran leader Muammar Gaddafi.

"Nearly all the oilfields in Libya east of Ras Lanuf are now controlled by the people and the government has no control in this area," said Abdessalam Najib, a petroleum engineer at the Libyan company Agico and member of the Feb 17. coalition that says it is running Libya's second city on an interim basis.

"The people at the fields and those transporting it (oil) to terminals are still working, but (work has been) shut down by, let us say, 75 percent. I work in oilfields and I was told this by someone at a very big oil company in Brega."

Oil industry sources outside Libya say crude oil shipments from Libya, the world's 12th-largest exporter, have almost halted because of reduced production, a lack of staff at ports and security concerns.

MUST BE FAIR

Jammal bin Nour, a judge and member of the Feb. 17 coalition, told Reuters oil contracts signed by Gaddafi's government would be respected as long as they were fair, good for Libyans, and not based on corruption.

"The oil deals (with foreign firms) that are legal and to the benefit of the Libyan people we will keep," Nour said.

While he acknowledged it was important to adhere to international contracts, he said:

"Some deals were unfair. The big oil companies have relations with politicians in America, Italy, ... (there has been) big corruption. They tried to draw a wonderful picture of Muammar Gaddafi. But he slaughtered the people."

"If the deals are good, we will support them. If not we have the right to negotiate and translate the will of the people in the street, who want democracy and are asking 'where is our money?'," Nour said.

He said the interim leadership would form a special committee to investigate whether deals were rooted in corruption. "There is no interest for us to support these deals," Nour said.

Another member of the coalition, Omar Mohammed said eastern residents would not damage oil wells. "There is no destruction of oil wells, they are ours. No way. If any destruction of the oil facilities happens, it will be Gaddafi doing it," he said. Libya normally produces about 1.6 million bpd of high-quality oil, or almost 2 percent of world output. Between 30 percent and 75 percent of output has been shut down due to the turmoil in the country. (Additional reporting by Mohammed Abbas; Writing by Caroline Drees, editing by Peter Millership)