US firm buys "mystery" cargo of Libyan rebel oil
NEW YORK (Reuters) - U.S. refiner Tesoro has bought the first oil cargo sold by rebels who control eastern Libya, a deal that could help them drum up funds to fight Muammar Gaddafi.
San Antonio-based Tesoro told Reuters on Wednesday it bought the Libyan rebel crude to process in its Hawaii refinery. The deal was first agreed upon in late April, company spokesman Mike Marcy said.
"We purchased a cargo of Libyan crude that was available at the time," he said in an email.
Swiss oil trading firm Vitol SA, which loaded the crude onto a tanker in Libya in early April, acted as middleman in the transaction, trading sources said.
While Vitol marketed the crude, Tesoro's purchase of the cargo marks the first transaction involving Libya's eastern rebels -- fighting with NATO's backing to topple Muammar Gaddafi -- and a major foreign commercial user of oil.
"It's an important precedent because it proves the rebels can find international buyers for their oil," a source at a major oil tanker operator told Reuters, requesting anonymity.
That could help pave the way for more Libyan oil sales. Rebels, who need funds to continue their fight against Gaddafi, want to sell more oil from the chunk of Libyan territory they control.
But due to the country's civil war, Libyan oilfield production has fallen to a small fraction of its normal 1.6 million barrels per day.
Potential buyers of eastern Libyan crude have also worried that international sanctions against doing business with Libyan firms make any transaction risky, traders and shippers said.
The Liberian-flagged tanker, called Equator, is laden with a million barrels of light Libyan crude worth around $100 million, and is scheduled to arrive in Honolulu around June 7, according to Reuters tanker tracking data.
Tesoro told Reuters that the Libyan crude cargo is not subject to sanctions.
"This purchase was made in strict accordance with the relevant White House Executive Order, signed by President Obama," Marcy wrote in an email.
In late February, the U.S. government pronounced it legal to do business with the rebel-controlled oil firm Agoco, which usually produces around 400,000 barrels a day. The firm had been part of the Gaddafi-controlled National Oil Corp until it fell under rebel control.
The tanker cargo had been floating idle near Singapore since late April, GPS data shows. The Tesoro deal lays to rest a mystery that has surrounded its eventual destination and buyer, which have been subject to speculation among shipbrokers and oil traders.
"There has been a lot of secrecy," a U.S.-based oil trader said. "Everyone wanted to know where the cargo was headed, but it was hard to track."
Vitol declined to comment on why the cargo was delayed, and did not reveal its buyer.
While the U.S. government executive order exempts rebel crude cargoes from sanctions, the United Nations and the European Union have also placed sanctions on Libya, and some legal experts say that buying oil from eastern Libyan may still entail risks.
Reuters wrote a special report about the Libyan crude cargo on May 16.
At that time, several sources said it appeared the cargo was in legal limbo, with oil companies weighing the potential risks of buying it.
(Emma Farge contributed reporting from London; Editing by David Gregorio and Lisa Shumaker)
- Tweet this
- Share this
- Digg this
- Malaysian plane still missing; questions over false IDs
- Australia's Wesfarmers plans A$1.12 billion insurance spinoff - report
- UPDATE 6-Libya threatens to bomb N.Korean tanker if it ships oil from rebel port
- Michigan woman dead for six years found only after money runs out
- WRAPUP 3-Malaysia Airlines plane missing at sea off Vietnam, presumed crashed
PLANE GOES MISSING
A Malaysia Airlines flight carrying 227 passengers and 12 crew was presumed to have crashed off the Vietnamese coast on Saturday, and European officials said two people on board were using false identities. Full Article
Over 95 pct of Chinese cities failed to meet environmental standards - minister. Full Article