Libya rebels pen oil deal with Qatar

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Libyan rebels have penned a deal with Qatar to market their crude oil abroad in exchange for food, medicine and - it hopes - weapons, a top official in the transitional government said on Friday.

"The Qatar government agreed, the agreement is signed, that they will market crude oil for us," Ali al-Tarhoni, a senior member of the Transitional National Council who is in charge of oil and finance, told reporters.

He said that under a 'barter' deal aimed at circumventing international sanctions, Qatar would market the oil and use the proceeds to purchase humanitarian supplies for the rebels.

He also said the rebels hoped to use the oil revenues to procure weapons -- 'any kind of arms we can get to'.

"We have a list of arms we need and are trying to get from different fronts to buy," said Tarhoni.

He declined to say from which countries the rebels hoped to obtain the weapons.

The official said the deal for Qatar to market rebel oil did not concern the major oil terminals at Ras Lanuf and surrounding villages, which the rebels have twice seized and lost in battles with Muammer Gaddafi's forces.

The oil will instead come from the Sarir oil field in the country's remote southeast, which he insisted was under the firm control of the revolutionaries.

Tarhoni said the rebels would be able to export one million barrels a week once they acquired the vessels to transport it.

"The only delay is finding the vessels... That is the only obstacle," he said.

Last Sunday, Tarhoni said the rebels, who were at the time in control of all the country's eastern oil facilities, expected to begin exporting crude 'in less than a week'.

"We are producing about 100,000 to 130,000 barrels a day, we can easily up that to about 300,000 a day," he told a news conference.

He said the rebel government had agreed an oil contract with Qatar, which would market the crude.

Tarhoni said the contract with Qatar would help ensure 'access to liquidity in terms of foreign denominated currency'.

"We contacted the oil company of Qatar and they agreed to take all the oil we export and market that oil for us," he said.

"We have an escrow account... and the money will be deposited in this account, and this way there is no middle man and we know where the money is going."

A spokesman for Qatar Petroleum, the tiny resource-rich nation's public oil company, declined to confirm the deal.

Libya's oil exports, ordinarily about 1.7 million barrels a day, have ground to a halt since the unrest began.

While the exports meet only two per cent of worldwide demand, Libya produces much prized 'sweet', low-sulphur crude which is easy and cheap to refine into petrol.