(Bloomberg) -- The Libyan central banker at the heart of a power struggle between the OPEC nation’s rival governments said a deal appears imminent to resolve the dispute and spur the resumption of vital oil output.
Sadiq Al-Kabir, the governor whose attempted ouster by the nation’s western government prompted eastern authorities to cut crude production, on Tuesday said there were “strong” indications political factions are nearing an agreement to overcome the current deadlock.
A detente between Libya’s feuding administrations would pave the way for more than half a million barrels a day of oil supply to return to global markets. The returning output would also come just as some members of the Organization of Petroleum Exporting Countries prepare to bring back part of their own curtailed supplies. Benchmark crude prices in London fell as much as 4.6%, wiping out all of this year’s gains.
While Al-Kabir and other bank staff fled Libya after threats from armed groups, he said in an interview from Istanbul, Turkey, he’s confident he’ll be part of any solution and is ready to return.
“If they sign today, I’ll be back tomorrow,” said Al-Kabir, who described receiving updates on negotiations from two parties involved in United Nations-mediated talks. It’s not clear if Libya’s internationally recognized western government would agree to the return of Al-Kabir, who’s previously been accused of mismanaging funds.
Libya was pumping about 1 million barrels a day of oil before the halt order on Aug. 26, with the vast majority of that coming from the east. Daily output plunged to about 450,000 barrels in the past week. The country holds Africa’s biggest proven oil reserves, but output has often been held hostage to political rivalries ever since the toppling of dictator Moammar Al Qaddafi in 2011.
The UN said late Monday that consultations with stakeholders in the capital, Tripoli, led to “significant understandings” and a plan to finalize an agreement the following day. It didn’t give details, nor say whether a deal would involve Kabir.
The UN-helmed talks continued on Tuesday, according to two people familiar with the matter. Though there’s been progress, the discussions remain fragile and challenges still exist, they said.
--With assistance from Simon Marks.
(Updates with oil prices in the third paragraph.)
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