Militia forces Libya’s NOC to declare force majeure on biggest oilfield

National Oil Company said the shutdown would result in a production loss of 315,000 barrels per day

NOC said armed militia had stormed the premises at El Sharara oilfield on Saturday. Reuters

Libya's National Oil Company on Monday declared force majeure on exports from El Sharara oilfield, which was seized at the weekend by a local militia group.

NOC said the shutdown would result in a production loss of 315,000 barrels per day at its biggest oilfield, and an additional loss of 73,000bpd at El Feel oilfield.

Production at the Zawiya Refinery was also at risk because of its dependence on crude-oil supply from El Sharara, NOC said in a statement, and said it was "reviewing" evacuation plans.

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Neglected locals storm Libya's largest oilfield

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Chairman Mustafa Sanalla said NOC would not negotiate with the militia group. “We will not pay a penny to anyone who closed the field... and we will never sit with them,” he told Al Ahrar TV.

NOC said armed militia had stormed the premises on Saturday after guards and locals claiming to be attached to the Petroleum Facilities Guard forced open the gates.

Members of the group, which sources told Reuters included local tribesmen from the impoverished region, then drove around in jeeps, filming themselves in videos they sent to journalists.

They stayed overnight in the vast, partly unsecured area, making good on a threat issued in October to stop production if authorities did not provide more development funds.

In Libya, armed men, often friends or relatives of existing guards, have regularly blocked oilfields to get added to the state payroll. At El Sharara, there are at least 1,500 PFG members, though almost 500 are civilians, Mr Sanalla said.

Libya is divided and run by two weak governments, and armed groups, tribesmen and normal Libyans vent their anger about high inflation and a lack of infrastructure on the NOC, which they see booking billions of dollars in oil and gas revenue.

Mr Sanalla said NOC had repeatedly informed the government in Tripoli about the problems at El Sharara, which had been attacked 110 times since 2011, the year Muammar Qaddafi was toppled.

But there was little co-ordination between the PFG in south-western Libya and the capital, he said.

Before the force majeure, Libya had been producing up to 1.3 million bpd, its highest level since 2013 when a wave of oilfield blockages started.

Oilfield blockades tend to be solved by authorities quickly giving more money to guards or locals living close by.

This blockade might be more complicated to resolve because the group that seized the facility included tribesmen, who have said they want funds to improve hospitals and other services that might take time to deliver.

Mr Sanalla said the NOC had made good on its promises of help to southern communities, but the government was responsible for resolving the broader situation in the south.