VITOL & LIBYA DEAL
Vitol, the world's biggest independent oil trader, is closing in on a deal with the national oil company of Libya to supply the war-torn north African country with billions of dollars of fuel.
The contract, which is expected to be signed in the next couple of days, comes as Libya's National Oil Corporation attempts to defend its neutrality in an ongoing struggle between the internationally recognised government in the east and an Islamist-backed group that controls the capital Tripoli in the west.
Last week, Glencore, the Swiss-based trader and miner, faced threats from the eastern government over an agreement with the NOC to market crude shipped from the country's biggest functioning oil terminal.
Libya, an Opec member, is producing a fraction of the 1.6m barrels a day it pumped before the downfall of Muammer Gaddafi four years ago. Its oil industry and infrastructure has been shattered by years of conflict that has divided the country.
Libya's refineries are barely functioning, leaving the country reliant on imports of fuels such as gasoline, diesel and heavy oils, which are crucial for its power and desalination plants.
Vitol has been a large supplier to Libya since 2011 when it helped rebel groups in the eastern city of Benghazi secure stocks of refined oil it needed in its fight with Mr Gaddafi.
The fresh agreement with the NOC, which builds on an existing contract in place since the start of the year, will see Vitol deliver fuel to all of Libya, including the heavy oil required to support local infrastructure.
"The UN Security Council recently said it was important for NOC to continue to function for the benefit of all Libyans," said Ian Taylor, Vitol's chief executive, in a statement.
"The key word there is 'continue'. NOC, based at its legal address in Tripoli, has served Libya well by staying independent. We are confident it will continue to do so."
Last week, the head of Glencore's oil business made similar comments after the internationally recognised government in the east said it would stop any tanker operating on behalf of the Swiss company from loading crude at its ports.
The eastern government has tried to set up a rival NOC to handle the country's crude exports and fuel imports after it was forced to flee Tripoli after it was routed by Islamist groups.
The NOC, one of the few national institutions still functioning, has repeatedly asserted its independence from the warring factions. Alongside the central bank, it controls the flow of oil revenues, the country's major source of funding.
As well as the rival governments in the east and west, Western officials are increasingly concerned about the presence of Islamic State. The militant group has established a foothold in central Libya where it controls the coastal city of Sirte.
"Libya is at a critical juncture," said NOC chairman Mustafa Sanalla. "A peace can be built around state institutions like NOC, but will be harder to achieve if they fragment. They must be kept intact."
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AN - China National Offshore Oil Corp. (CNOOC) is willing to invest $3 billion in its existing oil and gas operation in Nigeria, the Nigerian National Petroleum Corporation (NNPC) said on Sunday following a meeting with the Chinese in Abuja.
REUTERS - Production at Libya’s giant Sharara oil field was expected to fall by at least 160,000 barrels per day (bpd) on Saturday after two staff were abducted in an attack by an unknown group, the National Oil Corporation (NOC) said.
IMF - Output grew by 3.8 percent in 2017, underpinned by a resilient non-hydrocarbon sector, with robust implementation of GCC-funded projects as well as strong activity in the financial, hospitality, and education sectors. The banking system remains stable with large capital buffers. Growth is projected to decelerate over the medium term.
IMF - Higher oil prices and short-term portfolio inflows have provided relief from external and fiscal pressures but the recovery remains challenging. Inflation declined to its lowest level in more than two years. Real GDP expanded by 2 percent in the first quarter of 2018 compared to the first quarter of last year. However, activity in the non-oil non-agricultural sector remains weak as lower purchasing power weighs on consumer demand and as credit risk continues to limit bank lending.