Tribal groups loyal to General Khalifa Haftar have blocked oil exports from eastern Libyan ports and have also seized several oil fields in the south ahead of peace talks between Haftar’s LNA and the UN-recognized Government of National Accord.
A Sunday report by the Wall Street Journal added a key pipeline to the list of blocked assets that will affect Libya’s oil production adversely for at least a few days.
The pipeline connects the largest field in Libya, Sharara, and neighboring El Feel, to the Zawiya export terminal. According to the Libya Observer the pipelines were more than one. In any case, Sharara and El Feel together produce a sizeable portion of Libya’s total output, with Sharara alone capable of pumping 200,000 bpd.
The Libyan National Oil Corporation declared force majeure on oil exports soon after the news of the seizures broke and warned the blockade could cost the country $55 million daily, the Libya Observer reported. The blockade will also cost Libya between 500,000 and 800,000 bpd in lost oil production, according to different reports. Before the blockade, Libya was pumping around 1.3 million bpd.
Bloomberg quoted an unnamed source as saying production could drop as low as 72,000 bpd if the export halt extends and storage tanks get full. Related: Putin’s Powerplay Could Jeopardize The OPEC Deal
Al Jazeera reports the terminals and the fields were seized on Friday as a challenge to the GNA, who Haftar has been fighting for several months now with the ultimate goal of removing the government from power and, according to him, unifying Libya. Haftar and his Libyan National Army is loyal to the rival government in the East.
"Haftar's General Command and the Petroleum Facilities Guard of the Central and Eastern Regions have instructed the managements of Sirte Oil Company, Harouge Oil Operations, Waha Oil Company, Zueitina Oil Company and Arab Gulf Oil Company (AGOCO), subsidiaries of the National Oil Corporation, to stop oil exports from Brega, Ras Lanuf, Hariga, Zueitina, and Sidra ports," a statement by the company said as quoted by the Libyan news outlet.
The peace talks between General Haftar and Fayez al-Serraj, the Prime Minister of the GNA, began yesterday in Berlin.
By Irina Slav for Oilprice.com
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