External Content

The following content is sourced from external partners. We cannot guarantee that it is suitable for the visually or hearing impaired.

(Bloomberg) -- The Qatar crisis is reverberating in Libya, inflaming political divisions in the war-torn oil exporter and dragging commodity-trading giant Glencore Plc into a dispute over crude sales.

The row involves competing administrations of the National Oil Corp. that are vying to control crude exports from the OPEC member. In eastern Libya, the local military commander is backed by Saudi Arabia, the United Arab Emirates and Egypt, three of the countries attempting to isolate Qatar. The head of the NOC in that part of the nation has accused Qatar of using its 8.5 percent stake in Glencore to control the the Swiss trader’s sales of Libyan crude.

The chairman of the NOC administration in the western city of Tripoli, Mustafa Sanalla, denied that Qatar has control over Glencore’s operations. He said NOC extended an agreement with Glencore to sell all quantities of Mesla and Sarir crude blends that exceed the needs of local refineries.

The deal, originally signed in 2015, was renewed in December and now runs through the end of the year, Sanalla said in a June 11 letter addressed to a Libyan legislator and given to Bloomberg.

“The National Oil Corp. succeeded in selling all the available production from Mesla and Sarir thanks to its contract with Glencore despite the fierce war for consumers in the international markets,” Sanalla said in the letter. “This contract allowed Libya to earn regular foreign currency inflows.”

Glencore declined to comment.

Instability Risk

Qatar, the world’s richest country per capita and biggest producer of liquefied natural gas, faces commercial isolation after Saudi Arabia, the U.A.E., Bahrain and Egypt cut economic and diplomatic ties with the country last week. Their gambit threatens to exacerbate instability in Libya, which is struggling to restore oil output and exports after it collapsed into lawlessness following a 2011 uprising.

Nagi Maghrabi, chairman of the eastern NOC, accused Qatar of “financing terrorists” in Libya through Glencore’s sales of the country’s crude. Qatar controls Glencore through its shareholding, he said in a June 9 interview with the Cairo-based Youm7 newspaper.

The Qatar Investment Authority has a stake of less than 9 percent in the company and no representatives serving on its board, so has no operational control over Glencore, Sanalla said in his letter, addressed to Yousef al-Akouri, a member of Libya’s parliament and president of the committee in charge of NOC affairs.

For Libya’s remaining crude blends, the Tripoli-based NOC has sales agreements with 15 other companies, Sanalla said. The companies include Eni SpA, Total SA, OMV AG, Repsol SA, Rosneft Oil Co., Lukoil PJSC, Cepsa, Saras SpA, Socar, Unipec, Vitol Group, Gunvor Group, Petraco SpA and BB Energy, he said.

Peter Grauer, the chairman of Bloomberg LP, is a senior independent non-executive director at Glencore.

--With assistance from Jesse Riseborough

To contact the reporters on this story: Salma El Wardany in Cairo at selwardany@bloomberg.net, Hatem Mohareb in Cairo at hmohareb@bloomberg.net.

To contact the editors responsible for this story: Nayla Razzouk at nrazzouk2@bloomberg.net, Bruce Stanley

©2017 Bloomberg L.P.

Neuer Inhalt

Horizontal Line

swissinfo EN

The following content is sourced from external partners. We cannot guarantee that it is suitable for the visually or hearing impaired.

Join us on Facebook!

subscription form

Form for signing up for free newsletter.

Sign up for our free newsletters and get the top stories delivered to your inbox.

Click here to see more newsletters