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Rampant Corruption In The World’s Last Oil Frontier

Rampant Corruption In The World’s Last Oil Frontier

Endemic corruption in Kurdistan continues…

Sharara Oil Filed Loses 8,500 Bpd To Looters


Libya’s largest producing oil field, Sharara, may be losing 8,500 bpd of crude to looters, the National Oil Corporation said today.

The field, which normally yields some 315,000 barrels daily was seized by a group of local tribesmen and members of the Petroleum Facilities Guard in early December, which prompted the NOC to declare a force majeure on the field about a week later.

The group is demanding money for wages and what the Libyan Express referred to as “development funds”.

“The legitimate and rightful concerns of the Southern Libyan communities are being hijacked and abused by armed gangs, who instead of protecting the field to generate wealth for all Libyans, are actually enabling its exploitation and looting,” NOC's chairman, Mustafa Sanalla said as quoted by the Libyan daily.

Sanalla also warned that the continued suspension of production at Sharara and the takeover of the group could lead to damages in the Sharara field infrastructure and losses for the Libyan economy.

In late December, Prime Minister Fayez al-Serraj agreed to set up a fund of over US$700 million for the development of southern Libya, a part of the country that has been neglected for a long time, after negotiations with the attackers. The negotiations followed a warning from NOC’s Sanalla that the government should not pay the group as this would set a dangerous precedent.

At the time, the chairman of the state oil company said if the government paid the money the attackers demanded, the NOC would not lift the force majeure, which has also affected neighboring field El Feel, which uses power produced at Sharara.

Libya’s oil production slipped by 300,000 bpd in December on the back of the Sharara and El Feel shutdown as well as a result of harsh weather that temporarily closed the country’s oil export terminals.

By Irina Slav for Oilprice.com

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