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The Petroleum Facilities Guard Shuts Two Oilfields in Libya

The Petroleum Facilities Guard (PFG) has closed two oilfields in southern Libya, citing payment delays by the government, a brigade commander told Reuters on Tuesday.

The PFG has stopped pumping crude oil from the Gulf and Alwafa oilfields because the government has delayed paying the sums necessary to maintain security operations, Commander Mohammad Ahmad Alkhbasha said.

Libya’s state-run National Oil Corporation has not confirmed the closures.

The Al Wafa field normally pumps some 30,000 barrels per day of light oil condensate and produces gas for the Mellitah port, from whence it is exported to Italy.

Gas will continue to flow from Al Wafa as usual, said the PFG commander whose southern brigade controls six oilfields.

On Monday, NOC’s chairman Mustafa Sanalla said in a statement that delays in the budget funds for the corporation costs Libya billions of dollars in lost revenue and called upon the Presidency Council to explain the delay.

The NOC has estimated that budget shortfalls at the corporation have resulted in production losses of a total of 35 million barrels, or 229,000 barrels per day, valued at US$1.56 billion, since the Presidency Council took control of spending in March.

Libya’s oil output has plunged to some 300,000 bpd from 1.6 million bpd before the deposition of Muammar Gaddafi. In July 2016, Libya pumped around 300,000 bpd. Since the dictator was ousted in 2011, Libya has been plagued by Islamist militant attacks, protests and strikes, and unstable governments.

Just last week, the PFG reportedly shut down production at Libya’s Hammad oilfield, citing salary arrears.

The PFG’s modus operandi is to seize control of ports and oil fields with demands for financial rewards, as the restoration of law and order in the North African country remains a distant prospect. The possibility of hundreds of thousands of Libyan oil barrels re-entering international markets is equally distant.

By Tsvetana Paraskova for Oilprice.com

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