Libya’s NOC declares force majeure on El Sharara oil exports

A general view of the El Sharara oilfield, Libya December 3, 2014. (File/Reuters)
Updated 10 December 2018
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Libya’s NOC declares force majeure on El Sharara oil exports

  • Production at the Zawiya refinery was also at risk due to its dependence on crude oil supply from Sharara
  • With Libya divided into two weak governments, armed groups, tribesmen and normal Libyans tend to take their anger out over high inflation and a lack of infrastructure on the NOC

TRIPOLI/BENGHAZI: Libya's National Oil Company (NOC) said on Monday it has declared force majeure on exports from the El Sharara oilfield after the facility was seized by local militia.
NOC said in a statement the shutdown of its biggest oilfield would result in a production loss of 315,000 barrels per day (bpd) at the site, and an additional loss of 73,000 bpd at the El Feel oilfield.
Production at the Zawiya refinery was also at risk due to its dependence on crude oil supply from Sharara, the company said.
"NOC demands that the group leave the oilfield immediately without pre-condition," the statement said. It said it was "reviewing" evacuation plans but did not say whether staff had actually left the site.
A spokesman for NOC could not be immediately reached for comment.
NOC said in a statement on Sunday that armed militia had stormed onto the premises on Saturday after some guards and locals claiming to be attached to the guard force had opened the gates. Members of the group then drove around in jeeps, filming themselves in videos they sent to journalists. Sources told Reuters that local tribesmen were also in the group.
They stayed overnight in the vast, partly unsecured area, making good on a threat first issued in October to stop production if authorities did not provide more development funds for their impoverished region.
NOC blamed a militia which it said was claiming to be attached to the state security force assigned to guard El Sharara. In Libya armed men, often friends or relatives of existing guards, have regularly blocked oilfields to get added to the state payroll.
NOC "will not take part in negotiations with the militia or is willing to compromise following their decision to revert to violence, insulting language, and theft," the company said in its statement.
Libya is divided and run by two weak governments and armed groups, tribesmen and normal Libyans tend to vent their anger about high inflation and a lack of infrastructure on the NOC, which they see as a cash cow booking billions of dollars in annual oil and gas revenues.
Before the force majeure, Libya had been producing up to 1.3 million barrels of oil a day, its highest level since 2013 when a wave of oilfield blockages started, part of turmoil since Muammar Gaddafi was toppled in 2011.
Oilfield blockades like the current one tend to be solved by authorities quickly giving more money to guards or locals living close by to ensure they leave the site.
This blockade might be more complicated to resolve because the group that seized the facility included tribesmen, who have said they want development funds to improve hospitals and other state services which might take time to realise.


Disorderly UK exit ‘would hamper German growth’

Updated 1 min 50 sec ago
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Disorderly UK exit ‘would hamper German growth’

BERLIN: Europe’s largest economy will expand by 1.5 percent in 2019 if there is not a disorderly Brexit but growth will be weaker if there are major disruptions to trade between Britain and the EU, Germany’s BDI industry body said on Thursday.
If there are such disruptions, the German economy would grow by around 1.0 at most, the BDI said.
“A chaotic Brexit is now getting dangerously close to happening. Companies are looking into the abyss in these times,” BDI President Dieter Kempf said after the British Parliament rejected a Brexit deal.
“Businesses on both sides of the English Channel have no choice but to now fully prepare for a hard Brexit,” he added.