War-Torn Libya’s Major Oilfield Shut Down Again

War-Torn Libya’s Major Oilfield Shut Down Again

A group of armed men forced Libya’s major oilfield el-Sharara to close late on Sunday (1 October), effectively shutting down production of more than 230,000 barrels per day (bpd). Libya’s National Oil Corporation (NOC) declared force majeure on deliveries of the crude from the field due to “unrest”. NOC Chairman Mustafa Sanalla promised that production would restart as soon as possible. El Sharara is operated in partnership with oil companies Repsol, Total, OMV and Statoil.

Mr. Sanalla said the armed group called Brigade 30 was demanding the release of group members who had been detained. Later he said the group was guards demanding salaries but it was unclear whether they were officially employed at the facility. A purported statement from Brigade 30 said it had closed the field “due to the lack of response by Libyan officials to our repeated demands” and added that these included economic development for southern regions, a lack of medical facilities and payments of salaries in the country’s Petroleum Facilities Guard.

Libyan authorities say that they are sending sufficient fuel to southern Libya and claim that smuggling disrupts deliveries. El-Sharara has been subject to frequent disruptions, blockades by armed groups, security issues and protests. The field that has been producing up to 280,000 bpd is crucial to a recovery in Libya’s oil production. Output went up above 1 million bpd in June, more than four times the level in mid-2016. El-Sharara was producing about 234,000 bpd before the most recent shutdown and the national output had been 1 million.

Libya is exempt from OPEC-led oil output freeze, though country’s comeback has complicated the cartel’s efforts to bolster global prices. The nation was producing more than 1.6 million bpd before a 2011 Arab-Spring-inspired uprising, which led to a political and armed conflict that badly affected its oil industry.