Libya’s NOC declares force majeure at El Feel oil field

State-owned oil company halts production of 70,000 bpd at the production facility

Libya has some of the cheapest, largely sweet oil in northern Africa. But much of it has remained offline since a civil war erupted after the downfall of Muammar Qaddafi. Reuters

Libya’s National Oil Corporation shut down its El Feel oilfield in the south-west of the country after people entered the facility on Saturday and prevented employees from working.

The company declared force majeure at the field, also known as the Elephant field, NOC said in a statement on its website on Sunday.

Force majeure refers to an unforeseen set of circumstances preventing a party from fulfilling a contract.

The oilfield “was totally shut down on Sunday … making it impossible for the NOC to implement its contractual obligations”, it said in the statement.

“Accordingly, the National Oil Corporation is obliged to declare a state of force majeure on Mellitah crude until further notice.”

The total production at El Feel is estimated to be about 70,000 barrels per day, according to Reuters.

In December, four oilfields in Libya, including El Feel, were shut down by gunmen of the Petroleum Facilities Guard, a force employed to guard oil installations, over the issue of pay.

At the time, the NOC said it would take legal action against the strikers and condemned their actions.

Oil prices have continued to trade higher due to supply concerns following Russia’s military offensive in Ukraine and subsequent international sanctions led by the US and other countries to reduce Russian supplies in global markets.

Brent, the global benchmark for two thirds of the world’s oil, is up more than 40 per cent since the start of this year and was trading at $111.70 a barrel when markets closed on Friday.

“The NOC regrets the situation and demands that the language of reason and wisdom prevail and to keep the oil sector away from conflicts, in order to preserve the remaining dilapidated infrastructure, due to the consequences of arbitrary closures and the scarcity of budgets over the previous years,” the company said.

Libya has some of the cheapest, largely sweet oil in northern Africa. But much of it has remained offline since a bloody civil war erupted between rival factions after the downfall of Muammar Qaddafi in 2011.

The country, along with other Opec members including Iran and Venezuela, is exempt from the Opec+ production deal due to sanctions or security concerns that have restricted their output.

The total oil production of Libya in March reached 1.07 million barrels per day, according to Opec’s monthly oil market report.