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Libya’s largest oil field Sharara will reopen after Prime Minister Fayez al-Sarraj negotiated with the protesters that had blockaded it and agreed to meet their demands, Libyan media report. However, the National Oil Corporation has not confirmed it will restart the field.
Some media identified the protesters as members of a movement called Fezzan Rage, although initial reports of the blockade also named the Petroleum Facilities Guard as also taking part in the outage, as per the National Oil Corporation. The most recent reports also mention figures from the Petroleum Facilities Guard as taking part in the blockade.
The Prime Minister of the internationally recognized Libyan government acknowledged the demands of the protesters but said they could not be enforced on the government through threats and the disruption of Libya’s oil production.
The Sharara field has been shut down for almost two weeks now, after a group of local tribesmen and militants from the Petroleum Facilities Guard took control of it and demanded what NOC called a ransom for lifting the blockade. The state oil company warned against paying, noting this would set a dangerous precedent. In fact, the company’s chairman, Mustafa Sanalla, went as far as to say NOC will not restart production at Sharara if the government pays the PFG.
NOC declared a force majeure on the field last Sunday, which affected not just Sharara itself but also neighboring El Feel field, which gets its power from the larger field. Sharara supplies some 315,000 bpd to Libya’s total production, which had rebounded above 1 million barrels daily shortly before the blockade.
Now, Serraj has 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. Also, a PFG commander demanded on local TV that the prime Minister must also supply the guard with means to secure the field although he did not elaborate on the nature of these means.
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.