Libya resumes oil production after force majeure lifted

Libya’s eastern-based government and Tripoli-based National Oil Corp (NOC) yesterday announced the reopening of all oil fields and export terminals after a dispute over leadership of the central bank was resolved, Reuters reported.

This could pave the way for the OPEC producer to raise oil output significantly after the NOC said in a statement that it had lifted the force majeure at all oil fields and terminals as of 3 October.

“We have recently received a formal security assessment concerning Sharara, El Feel and Essider, which confirms that NOC can resume the Operations and Exporting Operations to its customers,” it said in the statement.

It added that chief Farhat Bengdara met the new central bank governor, Naji Issa, and they discussed a mechanism for the bank to finance projects to raise production to maintain financial sustainability and “compensate for the deficit in revenues resulting from closures and the decline in oil prices.”

Libya’s oil output has been disrupted repeatedly in the chaotic decade since 2014 when the country divided between two rival authorities in the east and west following the NATO-backed uprising that toppled Muammar Gaddafi in 2011.

Libya was producing about 1.2 million barrels of crude per day before output at the Sharara, El Feel and Essider oil fields was halted in late August and early September. It was exporting most of it. In September, exports averaged 460,000 bpd, according to oil analytics firm Kpler.

NOC declared force majeure on 7 August at Sharara oil field – one of Libya’s largest production areas with a capacity of about 300,000 barrels per day – and on El Feel oil field on 2 September.

The United Nations Support Mission in Libya (UNSMIL) welcomed the NOC announcing the lifting of force majeure on oil production. The mission emphasised that “it is essential that revenues from this vital resource be channelled through the appropriate institutional framework, and ultimately to the Central Bank of Libya.”

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