In Growing War, Libya's PM Abdullah Al-Thinni Says His Government to Run Own Oil Sales

Libya's Prime Minister Abdullah al-Thinni said his government would run its own oil sales and deposit revenues abroad in a bid to divert proceeds away from a rival, self-declared administration in Tripoli.

Crude revenues are at the heart of a battle for control of the North African OPEC producer that has pitted the two rival camps against each other in a growing conflict, four years after the fall of Muammar Gaddafi.

The fighting has worsened as militants loyal to Islamic State have become involved and exploited the chaos to carry out a series of high profile attacks.

On Sunday, a suicide bomber struck at a checkpoint near the Tripoli-allied town of Misrata, killing at least six people, including a woman and two children, and wounding 40 more, according to a local news agency.

Prime Minister Thinni announced late on Saturday that he had authorised his government's oil corporation to open a separate bank account in the United Arab Emirates for oil revenues, and to seek independent oil sales.

Until now oil sales and revenues have gone through Libya's central bank and the National Oil Corporation in Tripoli, which says it wants to stay out of the conflict between the two governments.

Thinni's government, which is based in the east, has made several announcements about a new payment system for the oil sector, but analysts say it will struggle to convince international traders it is legally entitled to claim ownership of Libyan crude.

Officials from the Tripoli-based state firm, also known as NOC, were not immediately available to comment on the plan.

Experts say Thinni will struggle to assert more control on the sector, with thousands of maps, documents and contracts stored with the NOC headquarters in Tripoli.

Thinni also said his government would also open representative offices of its NOC in the United States, Britain and Germany, and carry out swaps of Libyan crude for refined products and fuel to provide basic supplies.

Seeking separate oil transactions would likely exacerbate the conflict with the Tripoli administration, which was set up by Libyan Dawn forces who took over the capital in the summer and forced Thinni's government to withdraw to the east.

On Sunday, war planes from forces allied to Thinni's government carried out airstrikes on the outskirts of Tripoli to target Libya Dawn, an air force spokesman said. There were no immediate reports of damage or casualties.

Introducing a new payment mechanism would also mean breaking up the central bank system, the only source of hard currency for importers. It is also one of the last institutions left untouched by the power struggle, paying public salaries across the country.

The United Nations is trying to broker a peace deal between the two factions to form a unity government, sign up to a lasting ceasefire and get Libya's constitutional transition to democracy back on track.