UPDATE 1-Libya's NOC declares force majeure on Zawiya exports as Sharara output drops

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TRIPOLI, July 17 (Reuters) - Libya’s National Oil Corporation (NOC) said on Tuesday it had declared force majeure on exports from Zawiya oil terminal as production at Sharara oilfield dropped to 125,000 barrels per day (bpd).

Production at Sharara, where some staff were evacuated after two workers were abducted on Saturday, was enough to supply Zawiya refinery but left no excess for export, the NOC said in a statement.

Force majeure, a legal waiver on contractual obligations, had commenced on Monday, NOC said.

“Employee safety is always our first priority. This incident required us to shutdown and evacuate a number of stations,” NOC Chairman Mustafa Sanalla said in the statement.

“We have to prioritize local demand for fuel. For the time being all, Sharara production will go to the refinery,” he said.

Sharara, which was previously pumping around 300,000 bpd, has been key to a fragile recovery in Libya’s national production over the past two years.

The OPEC member’s output rose to about 1 million bpd a little more than a year ago, but has continued to fluctuate due to blockades, security problems and political conflict.

Tripoli-based NOC operates Sharara in partnership with Repsol, Total, OMV and Equinor , formerly known as Statoil.

An unknown armed group abducted the workers, one Libyan and one Romanian, from a control station on the periphery of the field on Saturday. (Reporting by Ahamed Elumami Writing by Aidan Lewis Editing by Edmund Blair)