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Libya's giant Sharara oilfield closed as gunmen press demands
October 3, 2017 / 1:16 AM / 2 months ago

Libya's giant Sharara oilfield closed as gunmen press demands

TRIPOLI (Reuters) - An armed group forced Libya’s giant Sharara oilfield to close late on Sunday, shutting off production of more than 230,000 barrels per day (bpd), the head of the state oil company said.

FILE PHOTO: A general view of the El Sharara oilfield, Libya December 3, 2014. REUTERS/Ismail Zitouny/File Photo

Libya’s National Oil Corporation (NOC) declared force majeure on deliveries of Sharara crude, citing “unrest”, according to a letter seen by Reuters. NOC Chairman Mustafa Sanalla promised that production would restart by Monday evening.

Sanalla told reporters that the armed group, Brigade 30, were demanding the release of group members who had been detained. In comments to Libya’s Channel TV station, he said they were guards demanding salary payments. It was unclear if the guards were employed in an official capacity at the field.

A statement purporting to be from Brigade 30 said it had closed the field “due to the lack of response by Libyan officials to our repeated demands”.

It said these included economic development for southern regions, provision of fuel and cooking gas, support for medical facilities, payment of salaries and jobs in Libya’s Petroleum Facilities Guard.

Sanalla said the NOC was sending sufficient fuel to southern Libya but that widespread smuggling was disrupting deliveries.

Sharara has been hit by repeated shutdowns or partial shutdowns this year, caused by blockades imposed by armed groups, security problems and protests.

The field, which has been producing up to 280,000 bpd, is crucial to a recovery in Libya’s oil output. Production rose above 1 million bpd in June, more than four times the level in mid-2016.

Sanalla said Sharara was pumping 234,000 bpd before the latest shutdown and that national production had been 1 million bpd on Sunday.

Libya is exempt from OPEC-led oil production cuts, and the North African country’s revival has complicated the bloc’s efforts to bolster global prices.

Libya was producing more than 1.6 million bpd before a 2011 uprising led to a political and armed conflict that badly affected its oil industry.

Production continues to be hampered by budget constraints and infrastructure damage, as well as groups that trigger shutdowns to press local demands.

Sanalla has campaigned against the blockades, touring the country to try to win over local groups.

“NOC restates its firm position that no demands can justify criminal shutting of production, and that NOC does not ever negotiate with such terrorist blockaders,” the NOC said in its statement on Monday.

Last month a group from southwest Libya, near Sharara, threatened to close the field over the detention in Tripoli of two members of a political delegation, though the two-day ultimatum they set passed without the field shutting.

Libya’s NOC operates Sharara in partnership with oil companies Repsol, Total, OMV and Statoil.

Reporting by Ahmad Ghaddar, Ayman al-Warfalli, Aidan Lewis and Ahmed Elumami; writing by Aidan Lewis; editing by Jason Neely

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