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Libya Works To Lift Force Majeure At Key Oilfields

Libya’s largest oilfields could see a resumption of production after what the Libyan National Oil Company (NOC) called the “illicit” closure of crude pumping valves late last week, with engineers telling Reuters on Monday that work was underway to restart operations. 

The NOC confirmed on 6 March that production was suspended at the Sharara and El Feel oilfields, taking 330,000 barrels per day offline after a pipeline valve was closed. 

“We have been informed that a group of suspicious gangs led by Mohammed Al-Bashir Al-Garj shut down the pumping valves of crude thus making it impossible to fulfill our commitments regarding refined products in the oil market. As such, we are obliged to declare the state of force majeure in line with standard practice in the oil industry,” the NOC stated.  

As two rival governments once again take shape in Libya, setting the stage for renewed conflict, the country’s two largest oilfields are once again being used as political leverage in the game to control the leadership, which depends on controlling the oil wealth. 

The closures come at a time when oil is over $100 per barrel, costing Libya $33 million a day. 

“Who benefits from these closures which come after the price jump that exceeded $100 per barrel? The same gang closed these valves between 2014 and 2016 which coincided with a similar price boom,” NOC chairman Mustafa Sanalla stated.  

Three weeks ago, the eastern-based parliament in Tobruk chose Fathi Bashaga as interim prime minister, to replace Tripoli-based current Prime Minister Abdul Hamid Dbeibah. In short order, a new government was formed and approved, though Dbeibah has refused to resign, leaving the country with two parallel governments–the same situation that led to its most recent civil war. 

The Libyan Oil Ministry, which supports Dbeibah, has been in constant conflict with the NOC and its long-time leader, Sanalla. 

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Bashagha has now ordered Libyan institutions to refrain from following any orders issued by the Dbeibah government. 

By Charles Kennedy for Oilprice.com

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