Africa Oil & Gas: Libya’s El Feel Oilfield Evacuated After Shutdown Threats

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Libya’s getting better at resolving stoppages in its oil industry

Libya’s National Oil Corporation has evacuated its workers from the El Feel, or Elephant, oil field amid threats from the field’s guards who are locked in a pay dispute with the company. The guards are from the Petroleum Facilities Guards group that held all of Libya’s oil export terminals under a blockade for more than a year until September 2016.

There has also been talk about a wider disruption to oil production, according to sources who spoke to S&P Platts, which might affect Libya’s largest oilfield—Sharara—which has the capacity to produce 300,000 bpd of crude. The El Feel oilfield yields around 90,000 bpd.

The evacuation comes on the heels of emergency talks between NOC and representatives of the Tubu tribe who demanded more frequent fuel supplies to their region, threatening El Feel with a shutdown as well.

If the fields are shut down this would deal a painful blow to Libya’s oil production, which last year managed to pass the 1-million-bpd threshold but is still far from the pre-war 1.6 million bpd.

Shutting down oil fields has become a popular way of making a point among various groups holding grudges against the government or the oil companies operating in the country. Sharara alone was the target of shutdowns at least three times last year.

Sharara and El Feel both send oil to the Zawiya refinery, which has a capacity of 120,000 bpd, which also includes an export terminal in the Oil Crescent.

Related: Saudis Ready To Swing Oil Market Into Deficit

Libya boasts the biggest crude oil reserves in Africa, but the civil war that ravaged the country after the removal of Muammar Gaddafi crippled its oil industry. Before the war, Libya produced 1.6 million barrels of crude daily. By the end of last year, the Tripoli-based NOC aimed to hit a target of 1.2 million bpd – short of the pre-war rate but double the March 2017 daily average. It failed in this, with production currently around 1 million bpd.

Rival factions in Libya’s east have attempted to sell oil on their own through the Benghazi-based NOC, which is not recognized by United Nations Security Council, which views the Tripoli-based NOC as the only legitimate exporter of Libyan oil.

By Irina Slav for Oilprice.com

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