Libya’s oil production could be slashed by more than 300,000 barrels a day (b/d), roughly a quarter of the country’s total, if protesters succeed in forcing operations to shut down at the key Sharara oil field.
Libyan production had risen to as much as 1.3 million b/d over the past few months, its highest level in years, but the sector has been vulnerable to blockades by rival militia groups and protesters. The 340,000 b/d Sharara oil field, located in the remote southwestern Murzuq basin, has been the target of numerous protests.
"We have decided to close the oil field in Ubari until our demands are materialised,” representatives from the Fezzan Rage Movement told the English language daily Libya Observer. The protesters have been demanding greater military support to secure the southern region, along with improvements for basic health and power services, among other demands.
“If not, we will close El-Feel oil field as well. Our demands are on the tables of the Libyan governments,” the protesters added.
State-owned National Oil Corporation (NOC) said on 8 December the field was still producing, but warned of drastic consequences of a forced closure.
“A forced shutdown could have long-term logistical consequences that would delay the reopening of the oil field. This, in turn, would lead to the suspension of a number of local oil and sustainable development projects, including the relocation of a southern refinery, designed to alleviate the local fuel supply crisis, and jeopardise local job creation,” NOC said in a statement.
NOC announced plans in November to install an old 55,000 b/d refinery, currently in Switzerland, to the south of country as it seeks to resolve the fuel crisis and create new economic opportunities in the restive region. Built in the 1960s, the Collombey refinery is owned by Libya’s Tamoil.
Closing El-Feel, or the Elephant field, also in Murzuq, would bring Libyan output down by another 90,000 b/d. El-Feel also depends on power generated at Sharara for its operations, so a full closure would also hit the field.
“Supply to the [120,000 b/d] Zawiya refinery would also be affected. This would equate to a combined daily cost to the Libyan economy of $32.5m,” NOC added.
A MEED Subscription...
Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.