Libya’s largest oilfield remains closed

NOC chairman Mustafa Sanalla rebuffed calls by eastern Libyan forces called Libyan National Army, which had taken control of El-Sharara oilfield and declared it secure. (AFP)
Updated 25 February 2019

Libya’s largest oilfield remains closed

  • The oilfield deep in Libya’s south has been closed since December
  • State guards and tribesmen seized El-Sharara to make financial demands

TRIPOLI: Libya’s El-Sharara oilfield, the country’s biggest, remains closed because an armed group is still there, the chairman of state oil firm NOC said on Sunday.
Mustafa Sanalla rebuffed calls by eastern Libyan forces called Libyan National Army (LNA), which had taken control of the 315,000 barrels a day field and declared it secure.
“The field is closed because of the presence of a group of civilians, this armed militia, and some military people with them,” the NOC chairman said in the video posted online.
The oilfield deep in Libya’s south has been closed since December when state guards and tribesmen seized it to make financial demands, the latest in several such closures over the past few years.
In January, the LNA, which is based in eastern Libya, started an offensive to secure El-Sharara and nearby El-Feel oilfields and fight militants in the south.
In February it sent a force to the field and last week handed control of it to the same oil security force that had been responsible for the closure, after holding negotiations with them over their demands.
The LNA later called on NOC to lift force majeure, a contractual waiver declared in December.
But Sanalla said NOC’s conditions for such a move, including safety for its workers and the departure of the armed group responsible for the field’s closure, had not yet been met.
“The field is not yet safe,” he said.
Sanalla said NOC was in contact with the LNA force, saying the state oil firm was neutral and dealt with all parties in Libya’s conflict, explaining his contact with the LNA.
He referred to the LNA as “army” as it is known in eastern Libya, the power base of its commander Khalia Haftar.
Haftar’s LNA control the east and have started an offensive in southern Libya. It is allied to a parallel government based in the east opposing the UN-backed administration in Tripoli where NOC is based.
The LNA already secures oil ports in eastern Libya and last week also claimed control of the El-Feel oilfield, which produces around 75,000 bpd.

Oil up on slowing pace of coronavirus, Venezuela sanctions

Updated 20 February 2020

Oil up on slowing pace of coronavirus, Venezuela sanctions

  • Financial analysts say epidemic is likely to deal a ‘short-term blow’ to global economy

LONDON: Benchmark Brent oil prices rose for a seventh consecutive day after demand worries eased with a slowing of new coronavirus cases in China and supply was curtailed by a US move to cut more Venezuelan crude from the market.

Brent was up 71 cents at $58.46 a barrel at 1510 GMT. The global benchmark has risen nearly 10 percent since falling last week to its lowest this year. US oil was up 53 cents at $52.58 a barrel.

“Those in doubt of the economic impact from the virus should take heed from Apple’s surprise sales warning ... Put simply, this is the surest sign yet of the coronavirus fallout on the global economy,” said PVM analysts in a note.

S&P Global Ratings said it expected coronavirus would deliver a “short-term blow” to economic growth in China in the first quarter, echoing findings by the International Energy Agency.

Official data showed new cases in China fell for a second straight day, although the World Health Organization said there was not enough data to know if the epidemic was being contained.

The oil market price structure is also showing signs that prompt demand for oil is picking up, as the front-month Brent futures market is moving deeper into backwardation, when near-term prices are higher than later-dated prices.

This week, oil prices were also buoyed by a US decision to blacklist a trading subsidiary of Russia’s Rosneft, which President Donald Trump’s administration said provided a financial lifeline to Venezuela’s government.

Hopes that the Organization of the Petroleum Exporting Countries (OPEC) and allied producers would deepen supply cuts also supported prices.

The grouping, known as OPEC+, has been withholding supply to support prices and meets next month to decide a response to the downturn in demand resulting from the coronavirus epidemic.

But in the US, which is not party to any supply cut agreements, oil production has been rising. US shale production is expected to rise to a record 9.2 million barrels a day next month, the Energy Information Administration said.