Libyan rebels reject talks with PM, keep oil ports shut

BENGHAZI/TRIPOLI, Libya Wed May 7, 2014 6:19pm EDT

A general view of the Zueitina oil terminal is seen in Zueitina, west of Benghazi April 7, 2014. REUTERS/Esam Omran Al-Fetori

A general view of the Zueitina oil terminal is seen in Zueitina, west of Benghazi April 7, 2014.

Credit: Reuters/Esam Omran Al-Fetori

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BENGHAZI/TRIPOLI, Libya (Reuters) - Rebels occupying major oil ports in eastern Libya said on Wednesday they would boycott Prime Minister Ahmed Maiteeq and keep two major export terminals shut for now, a blow to efforts to restore vital oil exports.

The rebels even warned they would take action if Tripoli did not fulfill its part of a recent agreement to reopen the oil ports, a veiled threat to close the terminals again.

"Nothing has been implemented," said Abd-Rabbo al-Barassi, self-declared prime minister of the rebel movement.

He accused the Muslim Brotherhood and other Islamists in parliament of undermining the agreement and trying to take over the ports.

The struggle over energy wealth is part of growing turmoil in the North African country three years after the overthrow of dictator Muammar Gaddafi.

Maiteeq's predecessor, Abdullah al-Thinni, reached an agreement with the rebels to reopen four of the ports, although only the smaller facilities, Hariga and Zueitina, have been handed over to government forces.

Both sides agreed to hold further talks over the larger Ras Lanuf and Es Sider exports terminals.

Barassi said the rebels would not deal with Maiteeq, claiming he had not come to power legally. The businessman was sworn in on Sunday after a chaotic election in parliament that was disputed by many deputies.

"Mr. Abdullah al-Thinni needs to explain or appoint someone to say why there is this delay and why the agreement has not been implemented," Barassi told a rebel television station.

If the government did implement the deal, then the rebels might take unspecific "measures." Barassi did not elaborate, but rebel spokesman Ali al-Hasi said this would mean asking tribal elders whether the reopened ports should be closed again.

Barassi said more talks about "new conditions" were needed to reopen the Ras Lanuf and Es Sider ports. He did not say what these conditions would entail, but top leader Ibrahim Jathran said the group wanted a federal system sharing power and oil wealth between the regions, an impossible demand on the weak central government.

There was no immediate comment from Tripoli, which has struggled to assert authority over a country awash in arms and rival militias, some of which have seized oil ports and fields to make political and financial demands.

DEFICIT

Their actions have cut oil output to 250,000 barrels a day from 1.4 million bpd last summer, eroding public finances that are almost entirely dependent on crude exports.

Parliament has failed to approve a budget for this year.

Libya will post a budget deficit of 10 billion Libyan dinars ($8 billion) because oil revenues will reach only 34.7 billion dinars, said Mohammed Ali Abdullah, head of the parliamentary budget committee.

However, the deficit might be much higher because the draft, which comes to a vote on Sunday, assumes annual oil production of 800,000 bpd and an oil price of $100 a barrel, an unlikely goal if the Ras Lanuf or Es Sider ports remain shut.

Total expenditures will be 59 billion dinars, mainly for public salaries and subsidies, Abdullah said.

He did not say how the deficit would be funded. The central bank had foreign reserves worth $115 billion at the end of February. Oil exports are also the only source of funding for annual imports of $30 billion.

In another sign of turmoil, most air traffic at Benghazi airport came to a halt for hours after a fight among ground staff.

The two main local carriers, Libyan and Afriqiyah Airlines, suspended operations after a member of the ground staff tried to smuggle two Chadians without travel documents onto a flight, airport officials said.

The employee scuffled with a colleague who tried to stop him, a source at ground handling firm al-Shorooq said.

And in Tripoli, gunmen beat up the chairman of one of the biggest state cellphone operators to demand that the company open an office in their town, a company source said. Staff plan to strike on Thursday, he added.

(Reporting by Ayman al-Warfalli, Feras Bosalum and Ahmed Elumami; Writing by Ulf Laessing; Editing by Andrew Heavens/Ruth Pitchford and Andre Grenon)

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