Libya’s NOC declares force majeure on El Sharara oilfield

NOC has described the occupiers of El Sharara oilfield, above, as militia trying to get on the payroll as field guards. (Reuters)
Updated 18 December 2018
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Libya’s NOC declares force majeure on El Sharara oilfield

  • El Sharara — a 315,000 barrels a day field was taken over on Dec. 8 by groups of tribesmen, armed protesters and state guards demanding salary payments
  • Some government officials favor offering quick cash to the occupiers to make them leave, but NOC officials have warned that would set a precedent

TRIPOLI: Libya’s state oil firm NOC has declared force majeure on operations at the country’s largest oilfield, El Sharara, a week after it announced a contractual waiver on exports from the field following its seizure by protesters.

The 315,000 barrels a day field, located in the south of the North African OPEC member country, was taken over on Dec. 8 by groups of tribesmen, armed protesters and state guards demanding salary payments and development funds.

Officials have been unable to persuade the groups, who have been camping on the field, to leave the vast, partly unsecured site amid disagreements how best to proceed, workers on the field said.

Some government officials favor offering quick cash to the occupiers to make them leave, but NOC officials have warned that would set a precedent and encourage more blockades, workers at the oilfield say.

NOC has described the occupiers as militia trying to get on the payroll of field guards, a recurring theme in Libya where many see seizing NOC facilities as an easy way to get heard by the weak state authorities.

Production will only restart after “alternative security arrangements are put in place,” NOC said in a statement.

Operations at the smaller El Feel oilfield continued as normal, engineers said.

“Production at Sharara was forcibly shut down by an armed group — Battalion 30 and its civilian support company — that claimed to be providing security at the field, but which threatened violence against NOC employees,” NOC Chairman Mustafa Sanallah said in the statement.

His comments came after the chief of staff of the Tripoli-based government, Abdulrahman Attweel, criticized some of Sanalla’s previous comments about the protesters as “irresponsible.”

“These people (guards) were there to protect the field without salaries and without any attention to them and their daily needs, not in terms of accommodation, supply, transportation and communication,” Attweel told Al-Ahrar channel late on Monday.

Their demands were legitimate, he said, echoing comments by some southern lawmakers and mayors demanding more jobs and development for the neglected region.
The blockade has been complicated by the presence of tribesmen, who have argued against quick cash payments saying they want funds to improve hospitals and other services, which might take time to deliver.

The shutdown of the El Sharara has not affected the El Feel oilfield, also located in the south. It continued to pump around 70,000 barrels a day, field engineers said.
Its exports were being routed via the Melittah oil and gas port, which like El Feel belongs to a joint venture NOC has with Italian energy company Eni, another engineer said.

A spokesman for NOC did not respond to a request for comment.
El Sharara crude is normally transported to the Zawiya port, also home to a refinery. NOC runs the field with Spain’s Repsol , France’s Total, Austria’s OMV and Norway’s Equinor, formerly known as Statoil.


Saudi economy forecast to grow 2% on stronger non-oil sector, higher government spending

Updated 17 min 33 sec ago
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Saudi economy forecast to grow 2% on stronger non-oil sector, higher government spending

  • But the growth estimate was lower than the official government projection of 2.4 percent
  • Saudi Arabia has programmed a 7.2 percent rise in its budget this year to 1.1 trillion Saudi riyals

DUBAI: The Saudi Arabian economy will expand by 2 percent this year with the non-oil sector getting a boost from higher crude prices and government spending likely to rise further in 2019, an Emirates NBD Research report said on Sunday.
But the growth estimate was lower than the official government projection of 2.4 percent, the report noted.
“Even taking the OPEC agreed production cuts which came into effect at the start of the year, we think average oil production in KSA will be at least 1 percent higher on average than 2018,” Khatija Haque, Emirates NBD’s head of MENA Research, said.
“We expect non-oil sector growth to accelerate to 2.8 percent as the lagged effect of higher oil prices and production feeds through to the non-oil sectors, and as government spending is likely to rise further this year.”
But the cautious economic outlook for Saudi Arabia is also true for the wider GCC region, Haque noted, considering a ‘slowing global growth and heightened geo-political risks globally.’
Average growth for the GCC states this year is forecast at 2.5 percent, with the UAE and Qatar likely to report faster growth rates, after the regional economy rebounded in 2018, driven by higher oil output.
Meanwhile for 2018, average GDP growth was pegged at 2.4 percent.
“Production in Q4 2018 was much higher than we had expected and as a result, the hydrocarbons sector contributed positively to overall GDP growth in the GCC last year,” the report said.
Emirates NBD Research has revised its oil forecasts for 2019 lower to an average of $65 a barrel for Brent, against the more than $70 a barrel previously.
“We expect budget deficits to widen modestly this year, based on our assumption of an average Brent oil price of $65 a barrel and increased government spending,” the report noted.
“The introduction of VAT in Bahrain and potentially Oman (the latter expected in September 2019) should help these countries address their sizable budget deficits, although other fiscal reforms will need to be undertaken to sustain any improvement over time,” it added.
Saudi Arabia has programmed a 7.2 percent rise in its budget this year to 1.1 trillion Saudi riyals, majority of it allocated for education and military spending, on a projected deficit of 4.2 percent.