Libya's National Oil Corporation has called for the reopening of the Ras Lanuf crude oil refinery after it won two arbitration cases against the owner and operator of the refinery, Libyan Emirati Refining Company, or Lerco, and Emirati company Trasta. Trasta and NOC are the joint owners of Lerco.
The cases were heard by the International Chamber of Commerce in Paris, which first asked Trasta to withdraw its case against NOC last November and last Friday settled the Lerco case in favor of NOC, awarding it US$116 million plus interest.
Lerco had demanded that NOC pays it US$812 million in compensation and Trasta had asked for more than US$100 million based on a sharing contract between the joint venture partners. Apparently, the French tribunal found the demands unsubstantiated, deciding the case in favor of the state oil company.
In a statement cited by Libyan Observer, NOC said that if the court had decided in favor of the plaintiffs, Libya could have lost more than US$10 billion.
Now that all that has been settled, NOC will push for the restart of the Ras Lanuf refinery as soon as possible, most likely in the second half of the year.
The Ras Lanuf refinery was shut down during the 2011 revolution and was restarted a year later. In 2013, refinery workers demanded that Libya take total control over the facility by rejecting a 20-month extension of the JV deal with Trasta. Following a demonstration at its headquarters, NOC agreed to review the deal, which, it was claimed, gave the operator of the refinery "unjustified discounts".
Since then, the problems with Ras Lanuf have been displaced from the spotlight by bigger ones, such as the battle for control over Libya's oil export terminals. But now the 220,000-bpd refinery is likely to garner more attention as it prepares to return to operation, if only by becoming a potential target for militants, who have recently focused on pipelines.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More