World News

Libya rebels receiving oil payments via Qatar fund

ABU DHABI (Reuters) - Oil payments for Libyan rebels selling crude oil are being made through a Qatari trust fund in U.S. dollars, a member of the oil and gas support group for Libya told Reuters on Monday.

Ill-equipped rebels fighting Libyan leader Muammar Gaddafi are growing increasingly desperate for cash for pressing needs such as food and medicine, prompting Western and Arab countries last week to pledge a cash lifeline potentially worth billions.

“The payments for the Libyan crude are made through a bank account in Qatar and the payment is made in U.S. dollars,” said the oil industry source, who asked not to be identified.

“So far around 1 million barrels have been sold at $100 million and the money is used to buy basic commodities like food and other aid,” the source said, speaking on the sidelines of a meeting of Libya opposition tribal councils in Abu Dhabi.

In April, trading sources told Reuters that China had bought the first oil cargo from Libyan rebels via trading house Vitol.

Soon after rebel forces took control of key oil facilities in Libya’s east, Qatar stepped in with an offer to help them market and sell oil, help them to fund their effort.

“We have set up an oil and gas support group in Doha and we now have an office there,” the source said. “Qatar is helping with marketing the crude and our main target market is now southern Europe.

Working closely with Qatar the rebel groups managed to establish a means of finance governance by which the payments could be transferred, but as infrastructure at ports remains heavily damaged the priority now will go to repairs.

“Through the oil support group in Qatar we plan to repair the infrastructure and restore oil recovery from the fields,” said the source, adding that for now further plans for exports are all “up in the air.”

There is currently no U.N. oil embargo on Libya, but Libya’s National Oil Corporation has been blacklisted. Since the company had effectively controlled the OPEC member’s entire oil sector, any potential oil sales linked to NOC could be problematic for the rebels.

Reporting by Amena Bakr; editing by Jason Neely