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OPEC+ Is On The Brink Of A Crisis

OPEC+ Is On The Brink Of A Crisis

OPEC+ members are on the…

Oil Production Drops As Libya’s NOC Declares Force Majeure Again

Libya’s national oil company declared force majeure on Sharara crude oil loadings on Wednesday, according to a source familiar with the matter.

The country's largest oil filed began shutting down late on Tuesday—the second time this month--after a valve on the pipeline linking it to an export terminal on the Mediterranean Sea was shut, according to what two sources with knowledge of the matter told Reuters. The valve was shut by “unidentified perpetrators” according to Reuters.

The NOC last declared a force majeure not even two weeks ago. At the time, production at oilfield was forced offline, preventing the NOC from carrying out crude oil loadings at the terminal. The lost amount was at $19 million per day. That closure was due to a valve closure by unidentified persons as well.

Sharara oil field produces around 290,000 bpd, which is nearly one third of Libya's crude output. It is a prime target that is frequently attacked and blocked by militias. The deposit is operated by a joint venture between Libya’s National Oil Corp. and Total SA, Repsol SA, OMV AG and Equinor ASA.

Sharara has been sporadically shut down due to various group press political or financial demands. Production there stopped for three months late last year after guards and armed residents seized the field and demanded payments, costing the NOC about $1.8-billion in lost oil sales.

Oil exports are the source of almost all state revenue in Libya, which has the biggest proven reserves of crude in Africa. Struggling to return to a pre-civil war capacity of 1.6 million bpd, prior to the shutdown Libya was producing 1.2- 1.3 million bpd.

Libyan oil revenues are expected to drop by as much as 17% in 2019 as a result of disruptions in production, the Tripoli-based central bank governor said last week.

By Charles Kennedy for Oilprice.com

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