Libya’s biggest oil field stopped producing just one week after it reopened, forcing the OPEC member to declare force majeure at a key export terminal, the latest disruptions to the country’s output and shipments of crude.
The pipeline carrying crude from the Sharara field to the Zawiya refinery stopped operating on Sunday, according to two people familiar with the matter who asked not to be identified because they’re not authorized to speak to the media. It wasn’t clear why the pipeline was shut. The National Oil Corp. declared force majeure on loadings of Sharara crude from the Zawiya oil terminal, citing a halt in production at the field, according to a copy of the NOC’s decree obtained by Bloomberg.
Sharara, in western Libya, was pumping 200,000 barrels a day, the NOC said on April 4. The latest halt is poised to affect the North African country’s production, which had just returned to about 700,000 barrels a day. Libya holds the continent’s largest crude reserves.
Clashes among rival armed groups in early March led to the closing of two of the nation’s biggest oil-exporting terminals, forcing a number of other fields to stop pumping. The ports have since reopened. Libya pumped as much as 1.6 million barrels a day before a 2011 uprising led to a breakdown in central authority and stunted oil production. The country is currently one of the smallest producers of the Organization of Petroleum Exporting Countries.
The NOC previously declared force majeure on loadings of Sharara crude from Zawiya on March 28, when the pipeline was blocked, before reverting a week later. Force majeure is a legal status protecting a party from liability if it can’t fulfill a contract for reasons beyond its control.
Zawiya, Libya’s second-largest oil-exporting terminal, was scheduled in May to ship eight Sharara crude cargoes totaling 4.83 million barrels, according to a copy of a monthly loading program obtained by Bloomberg. The outlook for the planned shipments—seven cargoes of 600,000 barrels each and an eighth of 630,000 barrels— wasn’t immediately clear.
Sharara is operated by a joint venture between the NOC and Repsol SA, Total SA, OMV AG and Statoil ASA. The field’s total capacity is 330,000 barrels a day.