Libya Halts Biggest Oil Field Loadings in Latest Disruption

Libya Halts Biggest Oil Field Loadings in Latest Disruption
Libya halted loadings from its biggest oil field in the latest disruption to the OPEC nation's crude production and shipments.

(Bloomberg) -- Libya halted loadings from its biggest oil field in the latest disruption to the OPEC nation’s crude production and shipments.

Force majeure was declared since Saturday on shipments from Sharara, made through the Zawiya export terminal, state-run National Oil Corp. Chairman Mustafa Sanalla said Monday by phone. Force majeure is a legal status protecting a party from liability if it can’t fulfill a contract for reasons beyond its control. 

A local armed group, which had closed the pipeline linking to the port of Sharara to demand the release from prison of one of its members, evacuated the area late Monday, Wessam Al-Messmari, an office manager at Petroleum Facilities Guard, said by phone. The PFG took control of the area and asked the state oil company to reopen the pipeline, he said. Al-Messmari had said earlier Monday that the pipeline should reopen within hours.

Libya is reviving its oil production and exports in spite of continuing political uncertainty. In July, crude production was at a four-year high and exports were the most in three years, according to data compiled by Bloomberg. While the expansion has helped Libya’s oil-dependent economy, the Organization of Petroleum Exporting Countries is trying to cut global supplies. That effort has been undermined by recovering output at OPEC members Libya and Nigeria.

Libya, which holds Africa’s largest crude reserves, pumped 1.02 million barrels a day in July. It was producing 1.6 million barrels a day before a 2011 revolt set off years of fighting between rival governments and militias.

Sharara has experienced several brief shutdowns caused by different groups this year. The oil field closed for two days in June due to a protest by workers there. Pumping was interrupted for several hours earlier this month after armed protesters shut some facilities. Production was 230,000 barrels a day, a person familiar with the situation said at the time. In April, the NOC declared force majeure at Zawiya after the pipeline stopped operating.

To contact the reporter on this story: Salma El Wardany in Cairo at selwardany@bloomberg.net To contact the editors responsible for this story: Nayla Razzouk at nrazzouk2@bloomberg.net Claudia Carpenter



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