Libya’s largest oil field halts production following protests

Hatem Mohareb and Salma El Wardany, Bloomberg January 03, 2024

(Bloomberg) – Libya’s largest oil field halted production after protesters entered the facility, according to a person with direct knowledge of the operations.

Libya's Sharara oil field

The country’s National Oil Corp. had warned earlier that a full stoppage and a force majeure were likely if the north African country was unable to meet the demands of protesters, according to a letter from the company signed by an NOC board member and obtained by Bloomberg. A group of people had entered the field in 20 vehicles, demanding jobs, services and a new refinery, according to a letter signed by a board member at the state company.

The Sharara oil field was producing roughly 270,000 bpd on Tuesday before the protests began.  

Libya’s energy facilities have been the focus of conflict since the fall of dictator Moammar Al Qaddafi in 2011, with armed factions shutting down oil production to press their political and economic demands. Operations at Sharara — run by a joint-venture between NOC with Spain’s Repsol SA, France’s TotalEnergies SE, Austria’s OMV AG and Norway’s Equinor ASA — were also stopped by protesters in July.

Continuing agitation will result in “a tumbling of exports, in addition to shaking the confidence of foreign partners and impeding efforts to stabilize production,” according to the NOC letter.

Force majeure is a legal term allowing companies not to meet their contractual obligations due to issues outside of their control.

OPEC member Libya kept production stable at around 1.2 MMbpd for most of the last year. NOC Chairman Farhat Bengdara said last month that the country is targeting at least 1.4 MMbpd by the end this year.

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