Libya's National Oil Corporation halts operations at El Feel oilfield due to political crisis
(MENAFN) On Monday, Libya's National Oil Corporation (NOC) officially halted operations at its El Feel oilfield in the southwest of the country, exacerbating supply disruptions amid ongoing political turmoil. The NOC declared force majeure at the field, citing “current circumstances” that have hindered its ability to carry out crude oil loading operations. Force majeure is a legal term referring to unforeseen events that prevent a party from fulfilling contractual obligations.
The political situation in Libya has been increasingly volatile, with tensions escalating between the country's eastern and western governments. Last Monday, the eastern government, led by military commander Field Marshal Khalifa Haftar, announced a complete shutdown of all oilfields, halting both production and exports. This decision followed a move by the UN-recognized government in Tripoli, headed by Prime Minister Abdul Hamid Dbeibah, to remove central bank governor Sadiq Al Kabir. The central bank governor's role was crucial in distributing the country's oil revenue between the competing governments.
In its statement, the NOC emphasized that the situation leading to the force majeure declaration was beyond its control, and thus it had no choice but to suspend operations at the El Feel oilfield starting September 2. The El Feel oilfield, which typically produces about 70,000 barrels of oil per day, is operated by Mellitah Oil and Gas, a joint venture between NOC and Italy's Eni. The field had already been shut down last week, but the force majeure declaration will not affect other hydrocarbon loading operations.
Prior to the latest disruptions, Libya's oil production was 1.17 million barrels per day in July. However, the company's output had already declined to 591,000 barrels per day by last Thursday. Rystad Energy’s senior analyst Svetlana Tretyakova noted that Libya faces significant risks due to political instability and infrastructure damage, which could further impact its oil production. Despite having some of the cheapest and largely sweet crude oil in northern Africa, much of Libya's oil production has been offline due to the civil war that erupted following the fall of Muammar Qaddafi in 2011.
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