Libya's National Oil Corp (NOC) has declared force majeure on crude exports from the Zawia and Mellitah terminals.
Libya suspended crude exports from two of its ports after militias shut down the OPEC member’s biggest field days before an election.
State-owned National Oil Corp. said the nation’s production had fallen by more than 300,000 barrels a day. Shipments are to halt at the port of Zawiya, which handles crude from the nation’s biggest field at Sharara. Force majeure has also been declared on crude exports from Mellitah, which is linked by pipeline to the Wafa field.
The drop in supply is set to bring Libya’s crude output to less than 1 million barrels a day. Any sustained drop from Libya, which sits on Africa’s biggest oil reserves, could counter efforts by the Organization of Petroleum Exporting Countries and its partners to boost production.
The disruption to exports was announced after members of the Petroleum Facilities Guard, a paramilitary force closed a valve on a pipeline taking crude from Sharara to Zawiya. The force, meant to protect energy facilities, did the same on a pipeline running to Mellitah, a person familiar with the matter said earlier.
Oil prices have rallied about 35% this year as economies recover from the worst of the coronavirus pandemic. Still, the spread of the omicron variant has weighed on the market, with Brent crude slumping on Monday to near $70 a barrel.
Libya’s output has held at more than 1 million barrels a day this year, according to data compiled by Bloomberg. The government is trying to attract billions of dollars of investment from foreign energy companies, including France’s TotalEnergies SE and Italy’s Eni SpA, in a bid to raise exports to 2 million barrels per day within six years.
Zawiya, near the capital city of Tripoli, is still open and workers can load oil in storage onto tankers, said the person familiar with the matter. Sharara pumps around 300,000 barrels a day at full capacity, while Wafa can produce 45,000 barrels per day.
The shutdowns come ahead of a presidential election scheduled for Dec. 24 that’s meant to end more than a decade of conflict and civil war. There are doubts the vote will go ahead, as disputes over the eligibility of candidates threaten to sow fresh turmoil.
Source : Bloomberg