June 27, 2018 / 10:45 PM / 19 days ago

East Libyan officials say oil money will go to their central bank

BENGHAZI, Libya (Reuters) - East Libyan officials said on Wednesday they would send oil revenue from areas under their control to a central bank based in the east, defying pressure to return recently recaptured ports to the internationally recognized state oil firm.

The comments were made as a parallel National Oil Corporation (NOC) in the eastern city of Benghazi said it had formally taken delivery of eastern oil ports at a ceremony at Es Sider terminal.

(Libya's oil facilities: tmsnrt.rs/2b9ZdLO)

It is unclear whether the Benghazi NOC will be able to export any oil, despite the eastern-based Libyan National Army (LNA) promising them control of all eastern ports and fields.

But the move has created deep uncertainty over OPEC member Libya’s oil production, and risks deepening a split between factions based in the east and west of the country.

The ceremony at Es Sider was attended by representatives of Libya’s eastern-based parliament and government, which are aligned with the LNA and oppose the internationally backed Government of National Accord (GNA) in the capital, Tripoli.

NOC Benghazi head Faraj Said, who was also present, called it a “happy and historic” day.

“We undertake that the money won’t go to someone shorn of legitimacy,” he said, a reference to Tripoli central bank head Sadiq al-Kabir, whom eastern factions have repeatedly tried to oust.

“We have a central bank in (the eastern town of) Bayda, and it is recognized by the Libyan parliament.”

Es Sider and the neighboring terminal of Ras Lanuf have been under LNA control since 2016. It let the Tripoli NOC operate the ports along with other eastern oil facilities, with revenue flowing to the Tripoli central bank.

But after fighting off the latest in a series of attempts by their opponents to seize the ports, the LNA said on Monday that this time they would hand Ras Lanuf, Es Sider, and other eastern ports and fields to NOC Benghazi instead.

Eastern government spokesman Hatem al-Oraibi said all previous oil contracts would be respected, but eastern authorities had taken the step because oil revenue had been going to “militias and extremist groups”.

In the past, Western powers have prevented NOC Benghazi from exporting oil independently of Tripoli under U.N. Security Council resolutions that give power over oil exports to the GNA and NOC in the capital.

On Wednesday, the United States, France, Britain and Italy said in a joint statement they were deeply concerned by the LNA’s offer of oil facilities to NOC Benghazi, and that the international community would “hold those who undermine Libya’s peace, security, and stability to account”.

U.N. Secretary General Antonio Guterres called for the return of oil resources, production and revenue “to the control of the recognized Libyan authorities”.

Writing by Aidan Lewis; Editing by Matthew Lewis

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