Libya shuts down its Sharara oil field amid rising tension

Libya has closed down its largest oil field, which had been producing 280,000 barrels a day, due to a pipeline blockade.

The blockade by an armed group has prevented crude from the Sharara field being loaded through the Zawya oil terminal, causing NOC, Libya’s national oil company, to declare a force majeure.

Analysts have been optimistic about Libyan production in recent months as the security situation in the North African country stabilised and allowed production to exceed a million barrels a day, although this is still somewhat below the 1.6 million barrels a day seen before the overthrow of Muammar Gaddafi and the subsequent civil war. The current peace between the East Libyan government (HoR) and the LNA of General Khalifa Haftar is thought to be tentative at best.

In addition, the HoR and the LNA are not the only armed militias in the country, and some of these groups may see the HoR–LNA deal as a threat to their own interests. Control over oil and gas production is a vital source of funding for the armed militias, and any clashes will likely have negative effects on production levels.

In 2013, ExxonMobil, the industrial lubricants of which can be sourced through Mobil UK distributors, cut back its presence in Libya as a worsening security situation meant it could not justify a substantial involvement there. The NOC CEO Mustafa Sanalla has since being trying to attract international oil companies back to Libya by opening up some appealing fields and ending the port blockades.