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UPDATE 1-Libya's silence on oil deals a setback for transparency

Fri, 25th Jan 2013 17:21

* Details of oil sales in 2013 confidential - NOC

* Post-war enthusiasm for transparency has waned

* Observers say there is still time for reform

By Jessica Donati and Marie-Louise Gumuchian

LONDON/TRIPOLI, Jan 25 (Reuters) - Libya will not reveal thedetails of its oil sales this year, National Oil Corporation(NOC) officials told Reuters this week, stepping back frompledges to deliver greater transparency after the corruption ofthe pre-revolutionary regime.

Oil producers commonly keep the details of crude dealssecret, yet Libyan officials promised to publish the details ofdeals after over 40 years of secrecy under deposed leaderMuammar Gaddafi.

The state firm revealed who would buy Libya's oil in 2012and began releasing information on prices and volumes of oilshipments on its website, but this lasted for just two months inlate 2011.

NOC Chairman Nuri Berruien said any secrecy clauses wereintroduced at the request of clients, not the NOC.

Most of last year's buyers will continue to purchase Libyanoil, he said, listing oil majors Exxon, Total, BP and Eni asexamples.

Only one or two have been removed from the buyers list forwhat he termed "bad performance", which had caused the statecompany some operational issues.

NOC will resume publishing details on its yearly activities,he said.

"I have asked them (marketing department) to put all of theactivities undertaken last year on the website, like an annualreport. I am surprised it is taking this long, but it will bethere," Berruien said.

Plans to address past corruption have also halted, however.A committee set up by the National Transitional Council (NTC)inlate 2011 to probe Gaddafi-era oil deals has made littleprogress due to the slow handover of documentation, according toone of its members.

The committee was dissolved, along with the transitionalauthorities, after July elections for the General NationalCongress. No task force has yet been formed in its place toinvestigate Gaddafi-era oil deals.

Progress on energy sector transparency has stalled,according to Tim Bittiger, a director at the ExtractiveIndustries Transparency Initiative, an NGO that seeks to promotetransparency in oil and mining.

"Indications at the moment are not that great. Partners havesuggested we wait until there is a new government in placebefore renewing talks", he said.

The Libyan congress now has its own 15-member energycommittee, headed by Suleiman Ghjum, which plays a supervisoryrole. It makes recommendations across a range of fields and hasplans to investigate corruption.

"We should look at all the contracts that look suspicious,"a member of the GNC energy committee told Reuters last month.

He said he wanted to meet with members of the now dissolvedNTC committee to talk about their work.

OIL BUYERS

Details on the identities of Libya's oil buyers this yearhave emerged through a survey of traders who were customers lastyear. Many are reluctant to disclose the volumes they have beenallocated, or they say that details are still being finalised.

Last year, the NOC provided a breakdown on allocations,revealing that trading houses had won around 9 percent ofLibya's full pre-war exports of 1.3 million barrels per day.

This was a break from a policy of restricting sales torefiners, although some refiners such as Italy's Saras remained the biggest customers.

"All the allocations have been awarded, but we haverestrictions, because some clients didn't like being named lastyear," the NOC source said, adding that confidentiality clauseshad been written into the contracts.

A survey of oil traders revealed that Italian refiners Eni and Saras would receive volumes similar to last year'slevels, while Spain's Repsol would take the same orslightly more.

China's Unipec, which was allocated a "good share" last yearaccording to the NOC at the time, was expected to increase itstake to 6-7 shipments per month, equivalent to just over 100,000barrels of oil per day (bpd).

Details on allocations to trading houses have yet to emerge.An industry source said, however, that Glencore, which took thelargest volume awarded to traders last year, would purchasecargoes on the spot market rather than under contract.

"We need to give the industry (and people within theindustry) time to break from the company culture that was inplace under Gaddafi, during which period anyone breakingprotocol or standing out from the crowd stood to be severelypunished," said Zara Rahman, research associate at energyconsultancy OpenOil.

"Changing that company culture won't happen immediately; itwas in place for over 40 years."

Rahman said the decision to keep the identity of this year'scrude oil buyers secret may also be linked to unrest, which attimes over recent months has brought parts of the industry to astandstill.

"It's unlikely, what with various strikes and upheavals inthe industry as we've seen over the past few months, that anyonein mid or higher level management would stick their neck out,"Rahman said.

"I would suggest that this could simply be a return topre-revolution protocol for want of a new protocol to follow."

The page on the NOC's website providing details on its oildeals remained available.

"In the wake of the great success of the glorious 17th Febrevolution, NOC has adopted the principle of transparency," thestate oil firm says on its website.

Below, there is a list of the names of firms that hadregistered for crude oil tenders and two months' worth ofdetails on shipment prices and volumes.

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