March 15, 2017 / 5:08 PM / 3 years ago

Libya's eastern parliament supports end of unified National Oil Corp

BENGHAZI, Libya (Reuters) - Libya’s eastern parliament said on Wednesday it supported ending a deal to unify the country’s National Oil Corporation (NOC), a day after eastern forces recaptured major oil ports from a rival faction.

Smoke rises from a burning vehicle following clashes between members of the eastern-based Libyan National Army (LNA) and fighters from Benghazi Defence Brigades (BDB), in Ras Lanuf, Libya March 14, 2017. REUTERS/Stringer

The fighting for control of the ports in Libya’s Oil Crescent, a strip of coast southwest of Benghazi, has raised fears of an escalation of violence and a reversal for the OPEC member state’s efforts to revive its oil output.

The statement from the parliament’s energy committee urged the eastern-based Libyan National Army (LNA) to hand over the ports of Es Sider and Ras Lanuf as soon as it had fully secured them, without saying who they should be handed to.

The LNA originally seized Es Sider, Ras Lanuf and two other terminals in September, handing them to the NOC in Tripoli and allowing Libya’s oil production to more than double. That move followed a deal in July to unify the Tripoli NOC with a rival NOC in the eastern city of Benghazi.

Until the recent fighting over the ports between the LNA and the Benghazi Defence Brigades (BDB), the LNA had continued to allow oil to be exported under the authority of Tripoli even though the NOC unification deal had stalled.

The parliament statement, coupled with the withdrawal of the NOC Benghazi head from the unification deal, appeared to signal that eastern-based factions may try to leverage their military control over the ports and other oil facilities.

Prior to the NOC unification deal, attempts by eastern authorities to manage oil operations independently of the U.N.-backed government in Tripoli had been blocked by international sanctions that remain in place.

The statement from the eastern parliament said it supported a withdrawal from the NOC unification deal partly because the NOC headquarters had not been moved to Benghazi, as agreed.

“We inform everyone of the end of the agreement by which the oil ports were handed over to the so-called unified NOC,” the parliament statement said.

An LNA spokesman said on Tuesday that a decision on who should control the oil ports would not be taken immediately, and that the head of the Benghazi NOC would inspect them.

National oil production dipped by about 100,000 barrels to some 600,000 bpd after the BDB attacked the ports on March 3. On Wednesday, LNA officials said they were continuing air strikes against the BDB a day after forcing them from the ports.

The LNA accuses political rivals based in western Libya of supporting the BDB.

Reporting by Ayman al-Warfalli; writing by Aidan Lewis; editing by David Clarke

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