Conoco buys Libyan oil, 1st of U.S. majors -sources

Thu Sep 29, 2011 12:18pm EDT

Related Topics

* To deliver to German Miro refinery - source

* Other U.S. majors also close to resuming buying

* Purchase to help further normalise Libya oil trade

By Dmitry Zhdannikov and Emma Farge

LONDON, Sept 29 (Reuters) - ConocoPhillips became the first U.S. major to buy Libyan oil following the end of international sanctions in a move to help the country restore normal oil trade after seven months of civil war.

Trading sources told Reuters that tanker Hellas Warrior, which loaded 381,000 barrels of Sarir and Mesla crude, was bought by Conoco for delivery to France's Mediterranean port of Fos/Lavera, and one source said it was destined for Germany's MIRO refinery.

Libya's Arabian Gulf Oil Company (Agoco) gave the cargo to Vitol in payment for oil product deliveries, and Vitol then sold it to Conoco, the sources said.

U.S. companies were among the most active buyers of light and low-sulphur Libyan crude before the civil war and were the first to stop purchases after Washington and the European Union slapped sanctions on the government of now-ousted leader Muammar Gaddafi.

Sanctions against Libya have been removed or eased about a month ago, but sources at U.S. firms have said it will take a few weeks before they can resume purchases of Libyan crude.

"We have done most of the work and are close to sorting out our internal problems to be able to buy again," said a source at a major U.S. firm other than Conoco.

A source at Libya's National Oil Corporation (NOC) confirmed that the transaction had taken place and said it expected to start dealing with U.S. oil firms directly in the near future.

"That deal was done through Agoco. We have some contacts with the United States and they tell us they can start buying again," he said.

Agoco, a subsidiary of NOC, has been handling marketing operations in recent months because of international sanctions on the umbrella firm.

The NOC source said that it would start marketing crude again by mid-October.

Oil is slowly starting to flow again from Libya after seven months of fighting and, if fresh projections prove correct, may beat the expectations of analysts, who think it could take three years to reach pre-war output levels.

Libyan oil industry is dominated by European players, although U.S. companies such as Conoco, Marathon , Hess and Occidental are also involved in a number of exploration and production projects in the country, the holder of Africa's largest oil reserves. (Reporting by Emma Farge and Dmitry Zhdannikov, editing by Jane Baird)

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