Glencore Loses Exclusive Oil Sale Rights To Libyan Crude Grades

Glencore has lost its exclusive right to market two of Libya’s crude grades and oil companies like Shell and BP have already had their first allocations of the grades to which the Switzerland-based commodity giant had held exclusive rights since 2015, Reuters reported on Thursday, quoting trading sources with direct knowledge of the events.

Glencore held the rights to market Libyan grades Sarir and Messla until the end of last year. The commodity trader was one of the few companies venturing into exclusive crude oil marketing deals with Libya in the wake of the 2011 unrest.

Back in 2015, Glencore secured a deal with Libya’s National Oil Corporation (NOC) to buy half of the country’s then oil production of around 400,000 bpd. That deal was for the only relatively stable onshore production in Libya at the time, with civil unrest and port blockades crippling the country’s oil production in recent years.

At the beginning of last year, Glencore was said to have extended its exclusive trading deal for an unknown period of time. The deal gave Glencore the right to be the sole trader of some 230,000 bpd from the oil fields Sarir and Messla.

Now it seems Glencore has lost the exclusivity, and other traders and trading arms of oil supermajors are moving in to lift Sarir and Messla crude grades.

“Companies like BP and Shell had their first Messla and Sarir allocation,” one trading source told Reuters.

Unipec, the trading arm of Chinese state oil major Sinopec, is also set to lift three cargoes from the Libyan port Marsa el Hariga, from which the Sarir and Messla crude grades are exported, according to a Reuters source.

Over the past year, Libya has recovered part of its oil production, despite a huge port blockade in the summer that basically shut in nearly all of its exports for weeks. The biggest oil field in Libya, Sharara, is currently under force majeure due to a blockade by tribesmen and members of the Petroleum Facilities Guard demanding payments to lift the blockade.

Libya’s NOC had an average oil production of 1.107 million barrels per day in 2018, NOC’s chairman Mustafa Sanalla said this past weekend. Total revenues reached US$24.4 billion, the highest since 2013 and a 78-percent annual rise. If the security situation improves, Libya plans to pump 2.1 million bpd of crude oil by 2021, Sanalla said. 

By Tsvetana Paraskova for Oilprice.com

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