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Oil rose early on Wednesday…
Libya has declared a force majeure on oil exports, even as oil prices worldwide are crashing.
Libya’s National Oil Company (NOC) has said that crude oil production has been shut in from four of Libya’s oilfields, including the prolific El Sharara.
El Sharara, Libya’s largest oilfield, has a capacity of 300,000 bpd. Other oilfields that are shut in include El Feel, Wafa, and Hamada. The oilfields were shut in by members of the Petroleum Facilities Guard (PFG), which is tasked with protecting the oilfields, according to the NOC. The PFC reportedly closed a valve on a pipeline going from Sharara to the Zawiya port, and another value from Wafa to Mellita.
A senior management reshuffling at Akakus Oil Operations—the operated of El Sharara—is rumored to be the bone of contention. Akakus is a JV between Libya’s NOC, Repsol, OMV, Equinor, and TotalEnergies.
As a result, the NOC has declared a force majeure on all crude oil exports from the Zawia and Mellitah terminals, and domestic electricty shortages abound.
OPEC’s compliance for November with its self-mandated production cuts was already too much, meaning the group is already underproducing. Libya’s outages will only exacerbate the group’s underproduction, which is already pushing 700,000 bpd as of November.
Libya’s crude oil woes come on the cusp of a presidential election in the African nation set for December 24. But there are serious doubts as to whether the election will actually take place on that date with numerous disputes abounding over who is eligible to run in the race.
Libya’s crude oil production was 1.140 million bpd in November, according to the latest OPEC Monthly Oil Market Report published last week, down from 1.155 million bpd from October.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.