The European Union said Friday it was lifting sanctions on Libya’s National Oil Corp. following the fall of Col. Muammar Gadhafi last month, ending a key hurdle to the meaningful return of the country’s oil exports to European consumers.
In its official journal, the EU said it was striking NOC, along with state-controlled oil-field and port operator Zueitina Oil Co., from a list of entities European companies were barred to have transactions with.
Until now, European companies were generally barred from buying lift crude fromLibya. The only exception was Arabian Gulf Oil Co, or Agoco, an Eastern oil company long controlled by the rebels which restarted production this month.
That created a legal conundrum for foreign companies, which, like Total SA are about to restart exports and would be expected to get an entitlement on their production through NOC.
The European move will also ease access to overdues from cargoes that were loaded by European companies but not paid after sanctions kicked in.
Though the end of the sanctions had been expected, its timing was unknown.
A virtual shutdown of Libyan oil exports after civil war erupted inLibyain February led to higher prices in Europe–its main customer–, forcing Saudi Arabia to boost its supply and consumers to draw into their emergency stockpiles. While a fraction of Libyan output has been restored, analysts think a full recovery of Libyan output could be two or more years away.
