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Tuesday, December 21, 2021
Libya’s National Oil Corp. (NOC) has declared force majeure on crude oil exports after the Petroleum Facilities Guard (PFG) shut down the El Sharara oil field which is responsible for a daily output of 300,000 bpd. NOC also states productions has ceased at the El Feel, Al Wafa and Hamada fields.
As a result, NOC says it will not be able to meet contractual obligations for crude oil exports from two major ports – Zawia and Mellitah – and a force majeure has been called.
Mustafa Sanalla, Chairman of the NOC’s Board of Directors, stated “The implementation of our commitments to refiners in the oil market has become impossible, and accordingly we are obliged to declare (the state of force majeure).”
The shut-in is believed to be a retaliatory action by Libya’s Minister of Oil Mohamed Aoun in response to the removal of Ahmed Ammar as chairman of Akakus by NOC. Sanalla and Aoun have been at odds since the minister was appointed. NOC and Sanalla have been vocal on the conflict with the Minister while Aoun has repeatedly tried to undermine the NOC chairman,
A statement issued by NOC read: “The Chairman of the Board of Directors communicated with the decision-making circles in the country to inform them of the consequences of stopping production and losing sales opportunities and incurring direct and indirect costs. Rather, it extends to the loss of quantities of gas from the Al-Wafa field in its reservoir and its migration to neighboring countries that have reservoir contact, which is impossible to recover. This affects the country’s gas reserves in because it is adjacent to the Libyan-Algerian borders, in addition, “within days we are forced to stop the Al-Zawiya refinery, which feeds the western region to the bottom of the mountain with fuel.”
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