Libya Halts Biggest Oil Field Loadings in Latest Disruption

Libya has halted loadings from its biggest oil field in the latest disruption to the OPEC nation’s crude production and shipments.


Force majeure was declared since the 18th August on shipments from Sharara, made through the Zawiya export terminal, state-run National Oil Corporation Chairman Mustafa Sanalla said on the 21st August. Force majeure is a legal status protecting a party from liability if it cannot fulfil a contract for reasons beyond its control.


A local armed group, which had closed the pipeline linking to the port of Sharara to demand the release from prison of one of its members, evacuated the area late on the 21st August, Wessam Al-Messmari, an office manager at Petroleum Facilities Guard, said.


The PFG took control of the area and asked the state oil company to reopen the pipeline, he said. Al-Messmari had said earlier that the pipeline should reopen within hours.


Libya is reviving its oil production and exports in spite of continuing political uncertainty. In July, crude production was at a four-year high and exports were the most in three years, according to data compiled by Bloomberg.


While the expansion has helped Libya’s oil-dependent economy, the Organisation of Petroleum Exporting Countries is trying to cut global supplies. That effort has been undermined by recovering output at OPEC members Libya and Nigeria.


Libya, which holds Africa’s largest crude reserves, pumped 1.02 million barrels a day in July. It was producing 1.6 million barrels a day before a 2011 revolt set off years of fighting between rival governments and militias.


Sharara has experienced several brief shutdowns caused by different groups this year. The oil field closed for two days in June due to a protest by workers there. Pumping was interrupted for several hours earlier this month after armed protesters shut some facilities.


Production was 230,000 barrels a day, a person familiar with the situation said at the time. In April, the NOC declared force majeure at Zawiya after the pipeline stopped operating.