Libya's NOC Warns of Force Majeure as Armed Group Shuts Sharara Pipeline

Libya's National Oil Corporation (NOC) has warned it could declare force majeure after an armed military group closed a valve on the pipeline carrying crude from the Sharara oilfield to the Zawiya port, the state oil company said in a statement.

The closure of valve seven has sharply reduced output at Sharara, one of the country's largest oilfields. Two engineers at the field said production has fallen by around 200,000 barrels per day and now stands at between 100,000 and 105,000 bpd.

The NOC said it had asked the Southwest Petroleum Facilities Guard to intervene, but technical teams have been unable to reach the area around valves six and seven.

The corporation cautioned that a prolonged shutdown could halt Sharara's output as well as transport and export operations, damage state revenues and force the Zawiya refinery to close. It urged the group to reopen the pipeline immediately and said it could be compelled to declare force majeure if the closure continues.

Sharara has a production capacity of around 300,000 bpd and has been repeatedly disrupted in recent years by protests, political disputes and technical problems.

Libya's oil production has suffered repeated shutdowns for political and technical reasons since the 2011 uprising that toppled Muammar Gaddafi. Last week, output at several other Libyan fields was halted after members of the Petroleum Facilities Guard shut a valve on a key crude pipeline, although NOC Chairman Massoud Suleman said at the time that Sharara was operating normally.