Libyan payment issues hold up crude cargoes in Libya, US Gulf
London (Platts)--2Mar2011/904 am EST/1404 GMT
Concerns over payment have delayed the loading and discharge of at least
two cargoes of Libyan oil, sources said Wednesday.
A vessel chartered by British major BP was being held at a jetty in Libya
half-loaded, a source close to the deal told Platts, as payment concerns held
up part of the cargo being supplied by Libya's National Oil Corporation.
The source said a portion of the cargo supplied by another European oil
company had already loaded but that the rest of the oil was not loading until
the company had worked out how and to whom payment should be made.
Sources said the payment issue was unlikely to be a direct result of the
sanctions imposed on Libya by the US, UN and European Union as none of them
specifically mention oil trade.
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"That's not sanctions, that's 'who do you pay?'," said a European trading
source. "In the East [of Libya] they won't let you pay the [pro-]Qadhafi
[element] surely," he added.
Another trader spoke of the problems dealing with Libya in light of the
sanctions, which forbid payment to President Moammar Qadhafi and his family.
Many European companies have set up joint venture companies with Libya's
NOC, creating the issue currently faced by BP, he said.
"If you are paying funds into a joint venture company then there is some
way that they will likely find their way back to Qadhafi somehow and that's
going to create a problem," he said.
A BP spokesman told Platts, "It's a complete no comment."
In the US Gulf, meanwhile, an unnamed trading house has postponed the
discharge of a Libyan crude oil cargo as it works through payment issues and
the concerns of breaking sanctions, according to a news report by Reuters.
The vessel, reportedly awaiting offshore between Texas and Louisiana, was
said to have been chartered before the unrest in Libya started in
CLEAN TANKER MARKET IMPACT
The sanctions have also affected the tanker market, with some owners and
charterers steering clear of Libya and shipping sources wary of further
sanctions targeted at the industry.
"Owners are already refusing to go to Libya and it is difficult to say
how [more] sanctions would affect us," said one broker of clean product
"There will be fewer cargoes available [out of the ports] but if owners
are willing to go there we could see big premiums and that could influence the
[broader] Med rates as well," he said.
Other sources said cross-Mediterranean clean tanker rates were almost as
high as they could be as charterers may refuse to fix ships at untenably high
"Rates are already very high, we peg it at around w210-215 even though
there were some ships fixed at w250," a second source said. "Charterers will
find it difficult to fix any ships [if this upward trend continues] but we
will have to wait and see."
Cross-Mediterranean clean tanker rates have soared from w140 on February
14, according to Platts data.
Although the recent UN sanctions do not specifically target the oil
industry, the clean tanker market has become volatile and further sanctions
could fuel further rate hikes, shipping sources said.
On Saturday, the United Nations Security Council referred human rights
violations in Libya to the ICC and agreed measures against the country's
rulers including an arms embargo, asset freeze and travel ban.
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