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By Hadi Fornaji.
Tripoli, 20 August 2013:
The National Oil Corporation has told its customers it can no longer guarantee contracted supplies of . . .[restrict]crude and refined products from four eastern terminals.
NOC officials confirmed today that a letter declaring force majeure on exports from Brega, Sidra, Ras Lanuf and Zueitina terminals obtained by Bloomberg News was indeed genuine.
The document, dated 18 August, followed a standard pattern, with the specific information that the four “sea port terminals are closed due to the Oil Security Guards who are on strike at these locations since the end of July 2013, which resulted total shutdown for these facilities and cease of all exports”. The letter was signed by NOC chairman Nuri Berruien.
By invoking the force majeure clause included in its contracts, effectively declaring that it is subject to events beyond its control, NOC is seeking to avoid liability for failing to honour agreed shipments.
A series of disputes at both terminals and producing fields has caused a collapse in output and exports. NOC this week maintained that output had fallen to 500,000 b/d. Some analysts think the figure has sunk nearer 300,000 b/d. There is, however, an officially acknowledged problem with the metering of oil and gas as it moves through transmission systems.
Given the remarkably speedy recovery in output after the revolution – approaching 1.6 million b/d early this year, the sharp drop has hit state revenues hard. Using a figure later disputed by Libyan premier Ali Zeidan, Oil Minister Abdulbari Al-Arusi said a week ago that the disputes had already cost Libya $1.6 billion in hydrocarbon earnings.
Virtually all the disputes are about pay or a call for more jobs to be created for locals, with the occasional variation that management are unsatisfactory and should be replaced. Petroleum Facilities Guards and operational workers have separately or in collaboration shut down tanker loading operations. Small groups of protestors, some of them armed, as at Zueitina, have merely blockaded entrances, forbidding workers to enter. However, a political impetus for the disruption is emerging, with federalists in both Cyrenaica and Fezzan saying they are determined to use it as a lever to force through a federal constitution. [/restrict]
