Libya's eastern authorities say oil money will go to Tripoli central bank

October 7, 2016 10:05 AM EDT

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By Ayman al-Warfalli

BENGHAZI, Libya (Reuters) - Authorities in eastern Libya will allow revenues from rising oil production to be paid into the central bank in Tripoli even though they do not recognize the bank's governor there, the head of Libya's eastern parliament told Reuters in an interview.

The pledge is a sign authorities in the east, who have resisted a U.N.-backed unity government in Tripoli, may not try to take direct control of oil resources and revenues, at least for now. They have previously failed in attempts to export oil independently.

Agila Saleh, president of the east's House of Representatives (HOR), said production should be managed by a unified National Oil Corporation (NOC) and revenues distributed fairly across Libya.

His comments came after the state-run NOC reopened major oil terminals seized last month by eastern military commander Khalifa Haftar, boosting national production by more than 200,000 barrels per day (bpd).

"The revenues of oil will be deposited in the central bank of Libya and will be for all Libyans according to geographic distribution and density of population," Saleh said. "All Libyans benefit from this wealth."

The HOR has been based in the eastern city of Tobruk since 2014, when rival armed factions took control of Tripoli, deepening the political turmoil and conflict that emerged after an uprising toppled Muammar Gaddafi in 2011.

Libya was left with two competing sets of institutions in Tripoli and the east, including rival branches of the NOC and the central bank.

The U.N.-backed government is now operating from Tripoli, but has failed to win endorsement from the east. Its leadership is currently drawing up a new list of ministers after seeing two proposed cabinets rejected by the HOR.

The NOC announced a deal to unite in July. The central bank is still divided, though NOC revenues continued to go through the bank's Tripoli headquarters throughout Libya's conflict.

Saleh he was planning to meet NOC Chairman Mustafa Sanalla and eastern central bank governor Ali Hibri, noting the HOR had previously sacked Tripoli central bank governor Sadiq al-Kabir.

"We will work to draft a new agreement with the (eastern) parliament's finance committee for harmonizing operations in the Libyan central bank and the NOC," he said.

GROWING PRODUCTION

Conflict, political disputes and local protests had reduced Libya's oil output to a fraction of the 1.6 million bpd the OPEC member was producing before the 2011 uprising.

Following the NOC's reopening of terminals seized by Haftar, national production rose this week above 500,000 bpd, from lows over the summer of between 200,000 and 300,000 bpd.

The European Union and the United States have imposed sanctions on Saleh, accusing him of blocking political progress in Libya. HOR members who support the U.N.-backed Government of National Accord (GNA) have said they were repeatedly obstructed from holding or participating in votes to approve it.

Saleh dismissed the sanctions as a "violation of Libyan sovereignty and democracy". He said he would accept civil society observers to monitor any future vote, but they had to be Libyan.

"The government has to be small, given the condition of the country, and it has to take into account all parts of Libya, east and west, and all constituents of the Libyan people," he said.

(Writing by Aidan Lewis; Editing by Patrick Markey and Mark Potter)



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