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Libya's El Sharara oilfield won't reopen until occupiers leave - NOC

LONDON (Reuters) - Libya’s biggest oilfield, El Sharara, will remain shut until an armed group occupying the site leaves, the head of National Oil Corp (NOC) said on Tuesday, more than a month after the field closed because of a protest.

FILE PHOTO: Chairman of Libya's state oil firm NOC Mustafa Sanalla talks to journalists at the beginning of an OPEC meeting in Vienna, Austria December 6, 2018. REUTERS/Leonhard Foeger/File Photo

“The armed group attempting to hold NOC and Libya’s economic recovery to ransom must leave the field before NOC will consider restarting production,” NOC Chairman Mustafa Sanalla told a Chatham House conference in London.

The field was producing as much as 315,000 barrels per day (bpd) ahead of its closure, but it has lost 13,000 bpd of capacity since last month due to security breaches, Sanalla told reporters on the sidelines of the event.

The oilfield has been under force majeure since December. Before the nation plunged into conflict in 2011, the site had the capacity to produce 340,000 bpd.

OPEC member Libya is now producing just below 1 million bpd, Sanalla said, below average production in 2018 of 1.1 million bpd.

NOC operates Sharara in partnership with Repsol, Total, OMV and Equinor.

Libya’s oil industry has faced disruption since unrest began, with rival power centres in the west and east. Protesters and armed groups have often targeted oilfields and energy infrastructure.

General Khalifa Haftar’s Libyan National Army (LNA), which is based in the east, launched a campaign this month in southwest Libya that it says aimed to combat militant groups and secure oil facilities in the area, including El Sharara.

NOC is based in the capital Tripoli, in the country’s west, home to the internationally recognised government.

Referring to the LNA initiative, Sanalla said the effort to restart the field “has been complicated further by the launch of an international counter-terrorism mission which has expanded into an attempt to seize control of territory, including potentially, national oil infrastructure”.

“It is my concern that a sequence of events has been set in motion with unknowable consequences for Libya, and NOC,” he said.

He said the preferred solution for securing the field involved deploying a Petroleum Facilities Guards (PFG) force, managed by NOC, adding that NOC would adopt this option with “some reluctance”.

Different factions of the PFG have previously been responsible for shutdowns at oil facilities.

He said NOC had suggested that, as an immediate measure, “a mixed force might provide a solution within a negotiated security framework” led by the Government of National Accord in Tripoli and with the support of the United Nations.

Reporting by Ahmad Ghaddar; Editing by Dale Hudson and Edmund Blair