Libya closes larger oil field, warns of more closures

(Bloomberg) Libya's oil production has fallen by more than half a million barrels per day as a wave of political demonstrations besiege the OPEC member's energy industry.

The Sharara camp in the west of the country, which can pump 300,000 barrels a day, was closed after protesters gathered at the site demanding the resignation of Prime Minister Abdul Hamid Dbeibé, according to people familiar with the matter. This came after the nearby El Feel deposit, with a daily capacity of 65,000 barrels, was paralyzed for the same reason.

Brega's export terminals were also closed on Monday, according to two people familiar with the matter who asked not to be identified because they did not have permission to speak to the media.

The country's production has dropped by 535,000 barrels per day and is destined to fall even further, said one of the people. As of Sunday, daily production was 1.1 million barrels, according to another person.

The state-owned National Oil Corp. has also formally suspended cargo from the eastern port of Zueitina on Monday and said it was the “beginning of a painful wave of closures.”

The NOC also declared force majeure, a clause in contracts that allows exports to be stopped, on deliveries from Mellitah, a western port powered by El Feel, as well as from Sharara, according to the people. Protesters threaten to stop operations at the Es Sider and Ras Lanuf terminals.

Workers at Libyan oil companies in Zueitina, Mellitah, Sarir and AGOCO were forced on Sunday to “completely and gradually shut down production,” NOC said in a statement. “NOC has always emphasized the importance of neutralizing the oil sector and avoiding political conflicts in the country.”

The closures are the latest in a series of disruptions that affected Libya's energy sector amid the worsening political crisis. Oil prices rose early on Monday partly due to disruptions.

They come at a delicate time for world commodity markets. Oil supplies have declined since Russia's invasion of Ukraine and Brent soared above US$110 a barrel.

Libya, mired in conflict since the fall of dictator Muammar Al Qaddafi in 2011, faces conflict between rival politicians. Dbeibé is resisting calls by some legislators to resign after they declared former Minister of the Interior Fathi Bashagha as prime minister in February.

Earlier this month, representatives of Eastern Commander Khalifa Haftar resigned from a national military committee that is meant to ensure that a ceasefire is maintained. They also said that Haftar should block oil exports.

The North African nation planned to hold presidential elections in December. But it was delayed only a few days earlier, which dealt a serious blow to the peace efforts.

Original Note:

Libya Closes Biggest Oil Field and Warns of More Shutdowns (4)

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