Just a day after production at Libya's largest oil field was suspended, the National Oil Corporation told local media that another field, Wafa, has also stopped producing. This could result in daily losses of as much as $10 million, NOC warned, adding that oil and gas from Wafa could siphon into Algeria, as the field is connected underground with Algeria's Alrar.
Sharara and Wafa together account for over 250,000 barrels of crude in Libya's total daily output. Two weeks ago, an unnamed armed group blocked the pipeline feeding crude from Sharara and Wafa into the Zawiya export terminal, sending oil prices soaring. Production was resumed a few days later.
This Sunday, reports of another pipeline block at Sharara emerged, again referring to those responsible for the block as unnamed armed groups. This situation was resolved more quickly, with intervention from NOC's chairman Mustafa Sanalla, who managed to convince the blockers to release the pipeline and allow the oil to flow.
Now, NOC is saying that restarting gas production at Wafa will be a complex matter for technical reasons. This is the third outage at Wafa: in late March, members of the Petroleum Facilities Guard turned off a gas pipeline valve cutting off gas supply to the Ruwais power station, claiming they were due wages - the same demand the PFG used when it controlled the four export terminals in the Oil Crescent.
Meanwhile, forces loyal to the Government of National Accord and the Libyan National Army, which is affiliated with the House of Representatives and the rival government in the East, are fighting for control over an airbase in southwestern Libya. The Tamenhint airbase is currently under the control of the GNA forces but the LNA is advancing.
While the political situation remains extremely volatile, despite calls for a dialogue between the West and the East from the UN's Support Mission's chief Martin Kobler, crude oil production is falling: even before Sharara's second shuttering, daily output had fallen from 700,000 bpd to 660,000 bpd.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More