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Libya has lifted its force majeure on Monday after it stopped loading crude oil for the weekend from the Zawiya terminal following the suspension of production from the country’s largest field, Sharara, on Friday.
"This is the result of an unlawful Sharara pipeline valve closure by an unidentified group between Hamada and the Zawiya port (on Friday evening), resulting in production being suspended," a statement by the National Oil Corporation, as quoted by AFP, read.
Sharara was shut down Friday, according to a Reuters report, because of a suspected valve closure on the pipeline carrying crude from the field to Zawiya. Before the closure, the field was pumping about 290,000 bpd. The closure, a NOC official told Reuters, would reduce Libya’s total production to a little over 1 million bpd. This is quite an improvement over production rates from December last year, when the country’s total production was about 1 million bpd including Sharara’s contribution.
The field is a favourite target for militants due to its size: it has a production capacity of as much as 340,000 bpd. The latest prolonged shutdown began in December when NOC declared a force majeure on Sharara following the occupation of the field by local groups demanding better living conditions and power supply security.
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The force majeure was only lifted in early March this year, having cost the National Oil Corporations some 20,000 bpd in lost capacity due to vandalism, creating a lots of US$1.8 million.
"Deliberate attempts to sabotage pipelines and production hurt both national oil revenues and critical power supply for everyday Libyans," NOC chairman Mustafa Sanalla said commenting on the latest shutdown of Sharara, highlighting once again the crucial importance of oil revenues for the North African country.
At the moment, Libya is in the throes of yet another major clash between pro-government forces and the Libyan National Army: a group affiliated with the eastern Libyan government, which is not recognized by the UN and supported by the United States. The LNA had complete control of the oil terminals on the Oil Crescent and has repeatedly clashed with other claimants of the key infrastructure. The group worked together with the UN-recognized NOC to get the country’s oil industry going again after the end of the civil war, but has now changed its priorities to removing the Government of National Accord from its seat in Tripoli.
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.