Protests Prompt Libya’s National Oil Corporation to Declare Force Majeure at El Sharara Oilfield

Libya’s National Oil Corporation (NOC) announced an immediate force majeure declaration at its Sharara oilfield, capable of producing up to 300,000 barrels per day, citing ongoing protests in the region.

The oil output disruptions in Libya have been frequent and turbulent since the 2011 NATO-backed uprising that ousted Muammar Gaddafi.

NOC clarified that the closure at Sharara has halted crude oil supplies from the field to the Zawiya terminal.

Situated in the Murzuq basin in southeast Libya, the Sharara field, managed by NOC through Acacus company, involves collaboration with Repsol from Spain, Total from France, OMV from Austria, and Equinor from Norway.

Efforts are underway to resume production swiftly, as negotiations persist, according to NOC statements.

Recent protests originating from the Fezzan region in southern Libya demanded public services and developmental initiatives, resulting in the shutdown of the Sharara field.

The oil and gas ministry voiced concerns about the ramifications of interrupted Libyan oil supply to the global market, highlighting the potential challenges in marketing Libyan oil and the extensive technical and financial efforts required to restore production.

Past incidents have seen disruptions due to tribal protests, such as the cessation of production at Sharara, Elfeel, and 108 fields last July, triggered by the abduction of a former finance minister.

Current protests emerging from the southern Ubari region reflect public discontent over soaring fuel prices and limited economic prospects, as reported by S&P Global Commodity Insights.

The impact of the force majeure at Sharara, Libya’s major oilfield, extends beyond the nation, potentially influencing pricing dynamics in the Mediterranean light sweet crude complex. Other crude grades like Azerbaijan’s Azeri Light, Algeria’s Saharan Blend, and Kazakhstan’s CPC Blend may experience value fluctuations.

Libyan crude, characterised as light, low in sulphur, and yielding substantial middle distillates and gasoline, holds substantial significance for refineries in the Mediterranean and Northwest Europe. Despite efforts, Libya’s oil output remains far below its pre-2011 uprising production levels, standing at 1.12 million b/d in November, according to the latest OPEC survey by Platts, a segment of S&P Global Commodity Insights.