Libya rebels say working on oil sanctions exemption

BENGHAZI, Libya (Reuters) – The rebel movement in eastern Libya is discussing plans with “friends” to exempt oil exports from sanctions imposed on North African state, a senior rebel financial official said on Friday.

Much of Libyan oil production comes from fields in the east, an area controlled by rebels seeking to oust Muammar Gaddafi. But shipments have halted and output from the fields has dwindled due to limited storage and refining capacity.

The rebels continue to provide for basic domestic needs, although toward the frontline of fighting during a rapid advance by rebel forces earlier this week supply lines were stretched and some fuel stations ran out of petrol.

Asked about the oil situation in east Libya, Ali Tarhouni, the rebel official in charge of economic, financial and oil matters, replied: “It goes a lot better, better than I hoped. We are meeting our basic needs.”

“What we want is an exemption from the sanctions. This is our main problem. It is very hard for us, it is an obstacle,” he said in Benghazi, adding rebels were discussing an exemption with “friends” in the international community.

He did not give further details.

A U.S. Treasury Department official has said rebels could sell Libyan crude without being subject to U.S. sanctions if they conducted transactions outside the National Oil Corp and other sanctioned entities in Gaddafi’s administration.

The main producer based in east Libya, the Arabian Gulf Oil Company (Agoco), is a unit of the state’s National Oil Corp.

Tarhouni had told Reuters on Monday that most of the 100,000 to 130,000 barrels per day (bpd) of crude the rebel-held eastern oil fields were now producing would be exported because the refining capacity in eastern areas is still relatively low.

Under normal circumstances, Agoco produces in excess of 400,000 bpd.

Qatar recognised Libyan rebels on Monday, a day after a senior rebel official said the Gulf Arab state had agreed to market crude oil produced from east Libyan fields no longer under the control of Gaddafi.

(Reporting by Angus MacSwan; Writing by Edmund Blair in Cairo)

Libya rebels say working on oil sanctions exemption