Libya Rebels Sign Deal to Reopen Eastern Oil Ports

LONDON--Libyan rebels have reached a deal to reopen two terminals which handle nearly half the country's normal oil exports, pushing crude prices to their lowest level in three weeks Wednesday.

The agreement, which was confirmed by the government, provides some relief for markets rattled by fears of disruptions in Iraq.

The two Eastern oil ports, called Es Sider and Ras Lanuf, have been occupied by a group led by Ibrahim al-Jathran, which is seeking greater regional autonomy.

In a televised news conference with Mr. al-Jathran, Libya's acting Prime Minister Abdullah al-Thani confirmed the agreement. "We have received today Ras Lanuf and Es Sider oil ports," Mr. Thinni said at Ras Lanuf terminal in eastern Libya. "This is the end of the oil crisis."

Earlier, Osama Sultan, an aide to Mr. al-Jathran told The Wall Street Journal that "an agreement was signed yesterday" to resume exports from the facilities. Libya's justice minister Salah El-Marghani, who was part of initial negotiations to seek resumption of operations at the ports, confirmed the rebels had agreed to reopen them.

But an oil official said the port operators hadn't received any official orders to restart operations at the ports, which normally load 560,000 barrels daily, nearly half of Libya's export capacity of 1.3 million barrels a day.

The prospect of a resumption of exports from the two terminals pushed Brent below $112 a barrel for the first time since June 12, and the contract has now shed more than $4 since reaching a nine-month high of $115.71 a barrel on June 19. At 1419 GMT, the Brent traded was down 0.72%, at $111.49 a barrel.

Oil prices have been buoyed in recent weeks after Sunni militants took over large parts of Western Iraq. The unrest sparked concerns that the conflict could somehow spill over to oil fields in the south of the country.

Any increase in Libyan oil exports will come as a welcomed relief after strikes and armed occupations at fields and ports since the fall of leader Moammar Gadhafi cut production to around a fifth of its normal output of about 1.5 million barrels a day.

In April, the rebels allowed the resumption of shipments from two smaller oil ports they controlled in Eastern Libya.

The group led by Mr. al-Jathran has now agreed to let operations resume because conditions set in April--such as the payment of arrears to oil guards had been met, Mr. El-Marghani said.

In addition, the rebels have decided to release oil flows in support of a new parliament which was elected last week, he said. Though the results aren't known, the lawmakers will replace an assembly dominated by Islamists, which Mr. al-Jathran's group had opposed.

However, some previous pledges to let exports restart haven't been respected or were followed by new interruptions.

Write to Benoît Faucon at [e-mail] or Ben Winkley at [e-mail]

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