Libya’s NOC declare force majeure on biggest oilfield

Libya’s National Oil Company (NOC) on Monday declared force majeure on exports from the El Sharara oilfield, which was seized at the weekend by a local militia group.

NOC said the shutdown would result in a production loss of 315,000 barrels per day (bpd) at its biggest oilfield, and an additional loss of 73,000 bpd at the El Feel oilfield.

Production at the Zawiya refinery was also at risk due to its dependence on crude oil supply from Sharara, NOC said in a statement, adding that it was “reviewing” evacuation plans.

Chairman Mustafa Sanalla NOC would not negotiate with the militia group. “We will not pay a penny to anyone who closed the field … and we will never sit with them,” he told Alahrar TV.

NOC said armed militia had stormed the premises on Saturday after some guards and locals claiming to be attached to the Petroleum Facilities Guard (PFG) force opened the gates.

Members of the group, which sources told Reuters included local tribesmen from the impoverished region, and then drove around in jeeps, filming themselves in videos they sent to journalists.

They stayed overnight in the vast, partly unsecured area, making good on a threat issued in October to stop production if authorities did not provide more development funds.

In Libya armed men, often friends or relatives of existing guards, have regularly blocked oilfields to get added to the state payroll. At El Sharara there are at least 1,500 PFG members, though nearly 500 are in fact civilians, Sanalla said.

Libya is divided and run by two weak governments and armed groups, tribesmen and normal Libyans vent their anger about high inflation and a lack of infrastructure on the NOC, which they see booking billions of dollars in oil and gas revenues.

Sanalla said NOC had repeatedly informed the government in Tripoli about the problems at Sharara, which had been attacked 110 times since 2011, the year Muammar Gaddafi was toppled.

But there was little coordination between the PFG in south-western Libya and the capital, he said.

Before the force majeure, Libya had been producing up to 1.3 million barrels of oil a day, its highest level since 2013 when a wave of oilfield blockages started.

Oilfield blockades tend to be solved by authorities quickly giving more money to guards or locals living close by.

This blockade might be more complicated to resolve because the group that seized the facility included tribesmen, who have said they want funds to improve hospitals and other services which might take time to deliver.

Sanalla said the NOC had made good on its promises of help to southern communities, but the government was responsible for resolving the broader situation in the south.