Libya has agreed to supply four major European trading houses with crude oil in 2012, a senior National Oil Corporation (NOC) source told Reuters on Wednesday, appearing to break from a policy of restricting sales to end-users.
Glencore was awarded the largest share among Europe’s trading majors, and will lift three cargoes of Libya’s prized sweet oil per month.
Swiss-based trading giants Vitol, Gunvor and Trafigura each won contracts worth approximately 18 cargoes, 12 cargoes and four cargoes per year respectively, the NOC source said.
Libya’s powerful state oil company has typically limited sales of crude oil to refiners in the region and has said it plans to continue to prioritise its usual customers in 2012.
But in an apparent break from tradition, the NOC will expand its pool of customers in 2012 to include Europe’s major trading houses, along with the country’s own trader Oil Libya.
“We made some exceptions for the benefit of the NOC, but not a big quantity,” the NOC source said, adding the lion share of Libya’s crude oil would be exported to refiners.
The country’s oil output has hit 1 million barrels per day, its oil minister said after an OPEC meeting last week, in a further sign of its more rapid than expected recovery after an eight-month long conflict.
The exact share awarded to Europe’s leading oil refiners varied, the NOC source said, but volumes were close to 5-6 cargoes of crude per month.
Libya also plans to sell similar volumes to Chinese refiners, awarding a “good share” to Unipec, the trading arm of China’s refining giant Sinopec, and refiner Petrochina.
The NOC had also decided to reduce the supply of crude oil allocated to Star Energy to 10 cargoes per year, the source added.
Libya was Africa’s third largest producer before the war, pumping around 1.6 million barrels per day and exporting about 1.3 million bpd, mostly to European clients.
As a result of its limited refining capacity however, the OPEC producer relies on imports for close to two-thirds of its gasoline needs. Libya recently awarded a tender to purchase up to 3 million tonnes of gasoline in 2012 to a pool of refiners led by Russia’s LUKOIL and Italy’s Saras.