First Es Sider crude export in months canceled as Libya tensions continue: sources

London — Libya's National Oil Corp. has canceled the export of a crude cargo from Es Sider, sources familiar with the matter told S&P Global Platts, with the security situation apparently still too tenuous to allow a Hess-chartered tanker to dock at the port.

The increased presence of armed mercenaries at Es Sider made NOC unwilling to lift the force majeure on loadings at the terminal, the sources said on condition of anonymity.

Hess had fixed the Greek-flagged Minerva Eleonora to take on 600,000 barrels of crude out of storage from Es Sider, and the ship had been scheduled to arrive Sept. 10, according to Platts cFlow, trade flow software.

Hess has declined to comment on the voyage, citing company policy not to discuss commercial matters.

NOC, which could not immediately be reached for comment, has maintained a force majeure on Es Sider and other key ports, with the rebel Libyan National Army imposing an oil blockade as it vies for control of the country against the UN-backed Government of National Accord.

But a ceasefire after UN-mediated talks in Geneva in August led to hopes that crude exports could soon resume, with production to follow.

The Petroleum Facilities Guard militia, aligned with the LNA, had said it may reopen key oil ports to allow exports of some barrels from storage tanks that have been filled to capacity, shutting in oil and gas production.

But the NOC has continued to warn about the heavy militarization of the facilities, by both LNA- and GNA-affiliated groups.

Hess would have been the first company to lift oil from Es Sider in nine months, except for a brief window in July, when the Vitol-fixed Kristi Bastion was allowed to export a cargo of 600,000 barrels, according to Platts cFlow.

Hess holds an 8.16% interest in Libya's Waha concession, which has 13 producing fields in the Sirte Basin linked to Es Sider.

Crude production in Libya, which holds Africa's largest crude reserves, has been slashed from more than 1.1 million b/d before the blockade to around 70,000-110,000 b/d in the past few months due to the oil blockade.

The Minerva Eleonora was reported fixed for Es Sider at Worldscale 60 on the cross-Mediterranean run, with options for UK Continent and US Gulf discharge.

Shipping sources said subjects had been already lifted on the fixture and that the vessel was already in front of Es Sider port.

"They will have to cancel the ship, but I imagine they had already agreed on a cancellation fee given the risks," a shipbroker said.

Market participants said Libyan loadings were priced at a premium to normal cross-Med loadings given geopolitical uncertainty and the risk of any one stakeholder failing the ship.

On Sept. 8, another Aframax tanker, the Drepanos, was said to be on subjects with Total on a Farwah-to-Turkey run set to load Sept. 16.