Libya’s state-owned National Oil Corporation (NOC) has declared force majeure on crude oil supplies from the Sharara oil field, after protesters took over the country’s largest oil field.

Sharara was producing approximately 350,000 barrels a day (b/d). However, the shutdown will also hit the nearby El-Feel oil field, which produces another 73,000 b/d, but relies on power from Sharara for its operations.

The 120,000 b/d Zawiya refinery, a key downstream facility supplying refined products for the northwest of Libya, is also at risk.

Their closure could cost the country more than $32m a day in lost revenues, NOC chairman Mustafa Sanalla warned in a statement on 10 December.

This is money Libya can ill afford to lose. NOC received a total of $2.87bn in revenues from oil and product sales in October, its highest level so far in 2018. The state oil company has earned $19.77bn from January to October, and projected its full-year revenues at $23.7bn, up 73 per cent compared to actual receipts in 2017.

The last few months have seen Libyan oil output stabilise at around 1.3 million b/d, its highest level in years. This is just 300,000 b/d shy of pre-revolution levels, but production has been volatile, with major swings due to attacks on its facilities, protests and the lack of storage at Libyan export terminals.

This was highlighted earlier in December when bad weather meant ships could not load at any of the export terminals. With the tanks filling quickly, NOC was forced to cut back upstream production.

If prolonged, the Sharara shutdown means NOC may have to revise its forecast for 2018 revenues downwards.

Sanalla blamed an armed militia attached to the local Petroleum Facilities Guards for the shutdown.

“NOC demands that the group leave the oil field immediately without pre-condition. NOC will not take part in negotiations with the militia or is willing to compromise following their decision to revert to violence, insulting language, and theft,” he said in the statement.