El Sharara oilfield to stay closed until occupiers leave

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Libya’s biggest oilfield, El Sharara, will remain shut until an armed group occupying the site leaves, the head of National Oil Corp (NOC) said, more than a month after the field closed due to a protest.

“The armed group attempting to hold NOC and Libya’s economic recovery to ransom must leave the field before NOC will consider restarting production,” NOC Chairman Mustafa Sanalla told a Chatham House conference in London.

The field was producing as much as 315,000 barrels per day (bpd) before the closure, but lost 13,000 bpd of capacity due to security breaches, Sanalla told reporters on the sidelines of the event.

The oilfield has been under force majeure since December. Before the nation plunged into conflict in 2011, the site had the capacity to produce 340,000 bpd.

OPEC member Libya is now producing just below a million bpd, Sanalla said, less than average production in 2018 of 1.1 million bpd.

NOC operates Sharara in partnership with Repsol, Total, OMV and Equinor.

Libya’s oil industry faced disruption since unrest started, with rival power centres in the west and east. Protesters and armed groups target oilfields and energy infrastructure.

General Khalifa Haftar’s Libyan National Army (LNA), based in the east launched a campaign in south-west Libya aimed at combatting militant groups and securing oil facilities, including El Sharara.

NOC is based in Tripoli, home to the internationally recognised government.

Referring to the LNA initiative, Sanalla said the effort to restart the field “has been further complicated  by the launch of an international counter-terrorism mission which has expanded into an attempt to seize control of territory, including potentially, national oil infrastructure”.

“It is my concern a sequence of events has been set in motion with unknowable consequences for Libya and NOC,” he said.

He said the preferred solution for securing the field involved deploying a Petroleum Facilities Guards (PFG) force, managed by NOC, adding NOC would adopt this option with “some reluctance”.

Different factions of the PFG were previously responsible for shutdowns at oil facilities.

He said NOC suggested, as an immediate measure, “a mixed force might provide a solution within a negotiated security framework” led by the Government of National Accord in Tripoli with the support of the United Nations.