Libya Halts Biggest Oil Field Loadings in Latest Disruption

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AUGUST 21, 2017 – 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.

Sharara has experienced several brief shutdowns caused by different groups this year. This time, the pipeline linking the port to Sharara was closed by a local armed group seeking that one of its members be released from Tripoli prison, Wessam Al-Messmari, an office manager at Petroleum Facilities Guard, said by phone. The pipeline should reopen in the next 10 hours, he said.

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 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.

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