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Libya’s Zawiya Terminal Struck By Labor Protests

Oil tanker

A labor strike at the Zawiya oil port in Libya delayed operations on Monday, but oil trading sources that spoke to Reuters said negotiations to end the disruptions are ongoing.

The protests centered on salaries, one local source said.

Reuters ship tracking data said the Seagrace tanker had been scheduled to load on Tuesday from the Zawiya port.

The past week has seen blips of instability in the Libyan oil sector. Crude oil production at Sharara, the country’s biggest oil field, was briefly suspended last week after the pipeline that feeds the crude from the field to the Zawiya terminal was blocked. That’s what local sources told Bloomberg, without adding any detail regarding the cause of the pipeline’s closure. Production at Sharara restarted on March 5.

Sharara pumps about 300,000 bpd, which is close to a third of Libya’s total 1.1-million-bpd production. The field has experienced several outages over the past year as various groups target it—or rather the pipeline to Zawiya—as a means to their own ends.

Last August, for example, production at Sharara was suspended several times. First, a militant group attacked a control room at Zawiya terminal. Then, a group of protesters blockaded the pipeline from Sharara to Zawiya, again leading to the suspension of production at the field. Earlier suspensions have had to do with oilfield workers protesting their work conditions and compensation.

Related: The OPEC Deal Could Fall Apart In June

Last month, protests also shut down most production from another field, El Feel. As of the start of this month, Bloomberg reports, El Feel produced just 25,000 bpd, down from 75,000 bpd before oilfield guards began their protest.

Libya boasts the biggest crude oil reserves in Africa, but the civil war that ravaged the country after the removal of Muammar Gaddafi crippled its oil industry. Before the war, Libya produced 1.6 million barrels of crude daily. Currently, with the two field closures, it pumps less than 1 million bpd.

By Zainab Calcuttawala for Oilprice.com

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