Libya's National Oil Corporation said it would not pay a "ransom" to have the armed militiamen that shut down the field last week lift their blockade, the company's chairman said in a statement.
NOC's chairman said if the Libyan Ministry of Finance paid the militants, this would set a dangerous precedent that would endanger Libya's economic recovery. A day earlier, Mustafa Sanalla said in a letter to the Prime Minister of the UN-recognized government of Libya that if a ransom was paid, NOC would not restart production at Sharara or lift the force majeure on the Zawiya export terminal and refinery, where the crude from Sharara goes.
Militants claiming they were members of the Petroleum Facilities Guard seized control of the field at the end of last week and are now demanding payment to release it. This harks back to the days when the PFG held control over all of Libya's export terminals and using them to extract money from NOC and the government.
Sharara is Libya's largest producing field, with daily production at more than 300,000 bpd. Earlier this week, Sanalla warned the shutdown of the field, which followed a rough weather spell that also took its toll on oil production, would bring Libya's oil industry to the brink of a crisis. A shutdown of Sharara immediately affects production at neighboring field El Feel, which pumps 73,000 bpd, as the smaller field relies on power supplies from the bigger one.
"I want to be clear, this militia has to leave the field immediately," Sanalla said in an earlier statement this week. "We stand wholeheartedly with the people of the south and understand their concerns. At NOC we are doing all we can to improve the living conditions of the residents. Their legitimate demands and grievances however have been used by criminals who are only in pursuit of self-interest."
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