ENERGY

Libya’s Sharara oil field shut again as pipeline blocked

Libya’s national production has more than doubled since last year after a blockade at major eastern oil ports ended. (Reuters)

Production at Libya’s Sharara oil field has stopped after an unknown group blocked a pipeline just one week after a previous shutdown, a Libyan oil source and a field engineer told Reuters on Monday.

Sharara’s production had recovered to 213,000 barrels per day (bpd) by Sunday, when the latest stoppage began. The new blockade led the National Oil Corporation (NOC) to declare force majeure on loadings of Sharara crude from the Zawiya export terminal, the oil source said.

Libya’s national production has more than doubled since last year after a blockade at major eastern oil ports ended, but the oil sector continues to suffer from frequent disruptions due to armed conflict, political rivalries and local protests.

Groups with financial or political grievances have often closed oil facilities to make demands for salary payments or funds for local development. In March the pipeline leading from Sharara was blocked for a week, triggering force majeure on shipments.

The NOC was hoping to boost output from Sharara to 270,000 later this month. The field is operated by the NOC in partnership with Repsol, Total, OMV and Statoil. Before the new shutdown at Sharara, the NOC said national production stood at 703,000 bpd.

Operating budget

It was aiming to raise output to 1.1 million bpd by August, but acknowledged that such targets depend on the corporation receiving money for its operating budget and oil facilities staying open.

“NOC faces huge challenges including the regularity of NOC’s obtaining of employees’ salaries in full and in a timely manner, the budgets related to maintenance operations, the blockades, and military actions which hinder production,” NOC said in a statement last week.

It also cited “some parties’ offering money to some militias, which encourages others to follow blockade tactics to blackmail the state.”

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Last Update: Monday, 10 April 2017 KSA 13:43 - GMT 10:43
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