January 15, 2018 / 2:25 PM / a year ago

Differences between operator, NOC cloud hopes for restart at Libya refinery

TUNIS, Jan 15 (Reuters) - The operator of Libya’s 220,000-barrels-per-day Ras Lanuf refinery has disputed a claim by the National Oil Corp (NOC) to have prevailed in a long-running legal dispute, a stance that could delay a restart at the plant.

Though the two sides expressed hope that the refinery would reopen following the rulings, both also appeared to set conditions for ending its four-year closure.

The cases relate to a number of complex claims between the NOC and Libyan Emirati Refining Co (LERCO), which owns and operates the refinery. LERCO is a joint venture between the NOC and TRASTA, a subsidiary of Emirati group Al Ghurair.

The NOC said the disputes had been settled by the International Chamber of Commerce in Paris in its favour, and that it had been awarded $116 million in one case brought by LERCO. It said a second ruling had forced TRASTA to withdraw a claim against the NOC.

But in a statement to Reuters, LERCO said the tribunal had ordered parties to bear the costs of the arbitration in equal shares, because “there was no clear prevailing party”.

The tribunal had dismissed a $4.4 billion claim by the NOC “in respect of LERCO’s alleged refusal to take-or-pay for certain crude oil”, as well as a claim over payment for oil allegedly delivered to the refinery during Libya’s 2011 uprising, LERCO said.

“The Arbitral Tribunal directed that NOC must transparently disclose the basis for its handling cost calculation at the beginning of every year so that those costs can be calculated and verified by LERCO,” it added.

“LERCO looks forward to restarting the refinery under clear and transparent conditions as soon as circumstances in Libya and site conditions permit and the Board of Directors of LERCO directs to do so.”

In response to LERCO’s statement, the NOC said its claim that there was no prevailing party in the Paris rulings was “absurd”.

“This case was initiated by LERCO, not NOC, and it backfired spectacularly,” the NOC said.

“NOC is seeking enforcement of the award and the earliest possible restart of the refinery.”

Neither side mentioned a deal signed before Libya’s 2011 uprising for TRASTA to invest $2 billion to upgrade Ras Lanuf refinery. The commercial dispute between the NOC and LERCO held up the deal, oil officials say.

Reporting by Hadeel Al Sayegh, Aidan Lewis and Ahmad Ghaddar; Writing by Aidan Lewis; Editing by Dale Hudson

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