Sharara Oilfield Faces Disruption as Libya's NOC Declares Force Majeure

On a consequential Sunday, Libya's National Oil Corporation (NOC) made the critical decision to declare force majeure at the Sharara oilfield, a major production hub with a capacity of up to 300,000 barrels per day. This abrupt move comes in response to ongoing protests in the area, marking yet another instance of disruption in Libya's oil output, which has been marred by instability since the NATO-backed uprising in 2011 that led to the removal of former leader Muammar Gaddafi.

The NOC, in a statement issued on Sunday, highlighted that the force majeure declaration at the Sharara oilfield has immediate implications, resulting in the suspension of crude oil supplies from the field to the Zawiya terminal. The Sharara field, nestled in the Murzuq basin in southeast Libya, is a key asset operated by the state oil firm NOC through the Acacus company.

This latest disruption is emblematic of a longstanding trend, with the Sharara field often becoming a focal point for local and broader political protests. The turbulent landscape in Libya, marked by regional and political tensions, has consistently impacted the country's oil industry, hindering its ability to maintain stable production levels.

Negotiations are currently underway with the aim of swiftly resuming production at the Sharara oilfield. However, the NOC did not provide a specific timeline for the resolution of the issues leading to the force majeure declaration. The field had faced closure just last week when protesters in the Fezzan region, situated in the south, demanded improved public services and development projects.

The consequences of such disruptions extend beyond the immediate economic impact on Libya. A statement from the oil and gas ministry on Wednesday emphasized the potential loss of confidence in the continuity of supplying the global market with Libyan oil. The ministry underscored that the uncertainty resulting from these disruptions could lead to Libyan oil remaining unmarketed, posing a significant challenge to the nation's economic stability.

Highlighting the gravity of the situation, the ministry elaborated on the serious consequences associated with the closure of oil facilities. It expressed the difficulty in quantifying and explaining the extensive damage that may occur due to these disruptions. The closure and subsequent reopening of production facilities necessitate meticulous maintenance operations, addressing technical problems, and demand substantial efforts, time, and financial resources, all of which are burdens borne by the Libyan state treasury.

This recent force majeure declaration at the Sharara oilfield echoes a similar event in July when tribal protesters halted production at not only Sharara but also Elfeel and 108 fields. The protest in July was triggered by the abduction of a former finance minister, showcasing the vulnerability of Libya's oil infrastructure to a spectrum of socio-political issues.