UPDATE 1-Italy, Russia firms to supply gasoline to Libya in '12

Fri Dec 16, 2011 12:17pm EST

Related Topics

* LUKOIL and Saras among 4-5 firms to supply gasoline -NOC

* Motor Oil Hellas and Tamoil also awarded volumes -traders

* Traders Vitol and Glencore won supply tenders for Nov, Dec (Adds quote, detail)

By Jessica Donati and Emma Farge

LONDON, Dec 16 (Reuters) - Libya's National Oil Corporation (NOC) said on Friday Russia's LUKOIL and Italy's Saras were among a pool of four or five firms chosen to supply the country with up to three million tonnes of gasoline in 2012.

"The best offers have been decided and we have informed the companies that their offers have been accepted," a senior source at the NOC said.

LUKOIL and Saras beat up to 35 other companies in the scramble to establish ties with Libya's new oil chiefs.

Additional volumes had also been awarded to Greek refiner Motor Oil Hellas and Netherlands-based Tamoil, according to trading sources.

The NOC confirmed a Greek refiner was among the chosen firms, winning a contract to supply around one cargo per month. Further details on individual volumes assigned were unavailable.

"It depends, according to their offers. Some firms have offered more than others," the NOC source said.

Libya's oil industry is rapidly recovering from an eight-month civil war that forced its oil production to a virtual standstill for much of the year.

Libya was Africa's third largest producer before the war, pumping around 1.6 million barrels per day of crude oil and exporting about 1.3 million bpd, mostly to European clients.

Exceeding expectations worldwide, the country's oil output has hit 1 million barrels per day, its oil minister said earlier this week after an OPEC meeting.

TRADERS OR REFINERS?

The decision to award the volumes to key refiners in the Mediterranean marks a turning point after trading houses supplied Libya with the bulk of its products during the past year.

It is also a further sign that Libya's oil industry is resuming its pre-war activities. The NOC on Thursday named 10 companies that will get priority access to term supplies of its crude oil.

These included traditional buyers among Europe's refiners that stood by the country's new leaders in its civil war.

A source at a trading house said that the gasoline tender results had not come as a surprise.

"Libya should be supplied by refiners, doesn't work for traders," he said.

Trading houses Vitol and Glencore were chosen in the past two months to supply Libya's government with fuel until the end of 2011 in a move that was seen as increasing their chances of snapping up crude oil deals for the following year.

But the NOC has traditionally only signed term contracts with end-users and oil trading companies did not appear on the initial list of allocations.

On the other hand, Libya's powerful oil body has said it may yet award further volumes of crude oil to traders such as Vitol and Glencore in future.

Libya's oil exports remain well below pre-war levels of around 1.3 million bpd, but outward flows were expected to have risen to around 500,000 bpd by December, more than double the previous month's rate.

And while oil companies scramble for resources in the week ahead, when negotiations for the delivery of distillate products like diesel and fuel oil take place in Istanbul, the struggle in Libya to keep the country united continues. (Reporting by Jessica Donati and Emma Farge, additional reporting by Simon Falush; Editing by Anthony Barker)

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