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Breaking News:

Oil Should Stay In Triple Digits: Analyst

Libya Arrests Oil Executives For Alleged Offshore Fraud

Just as Libya loads its first tanker from a new floating storage platform in the offshore Bouri oilfield, authorities have detained four senior oil executives over fraud related to the vessel.

Authorities on Monday arrested four senior executives from Mellitah Oil and Gas, which operates the Bouri field in a joint venture between the National Oil Corporation and Italy’s Eni, according to Libya media reports.

The authorities allege that the four abused their power and wasted public money in the acquisition of the 120,000-ton Gaza storage tanker, which is part of the US$425-million floating storage and offloading vessel (FSO).

More specifically, the authorities allege that the contract price of the Gaza was inflated, and claim that an 11-month delay in the delivery of the vessel was not reimbursed in line with a penalty clause for five percent of the contract value.

The names of those arrested have not been released officially.

On Monday, the new FSO loaded its first tanker from the Gaza platform, which was constructed in South Korea. The platform arrived in May 2016 and began pumping crude in January 2017. The new platform replaces an ageing Italian platform.

The platform’s storage tanks have a capacity to hold 1.5 million barrels.

Related: Artificial Intelligence To Reveal The Biggest Secret In Oil

Production began in the Bouri oilfield in 1988. It was discovered in 1976.

The news comes as Italian oil giant Eni is working to increase its activities in Libya, despite the political chaos, and despite the fact that other supermajors have withdrawn entirely.

In January, Eni launched exploratory drilling for gas offshore.

The political situation in Libya is still such that the continuation of current production levels is uncertain at best. While the country is now producing 715,000 barrels per day, down from its Ghaddafi heydays of 1.6 million bpd, the ongoing power struggle and rapidly shifting alliances render stability elusive, and allows smuggling to thrive.

Last week, forces of the Misrata militia announced the creation of yet another ‘guard’—the Libyan National Guard (LNG)—ostensibly to “protect” institutions. Yet they have already engaged in clashes with the flailing UN-backed Government of National Accord (GNA). This has pushed GNA closer to its main rival, General Haftar of the Libyan National Army (LNA).

Then, on Monday, unnamed sources told Libyan media that the head of the GNA’s Presidential Council was planning in the coming days to propose the formation of a ‘mini-government’ that would have a unified military council headed by General Haftar.

If successful, this new alliance could help unify Libya, at least temporarily.

By Damir Kaletovic for Oilprice.com

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