NOC declares force majeure at Sharara oilfield due to militia occupation at daily cost of US$ 32.5 million

By Sami Zaptia.



London, 11 December 2018:

Libya’s National Oil Corporation (NOC) declared a state of force majeure at the Akakus operated Sharara oil field as of Sunday, December 9, 2018.

The NOC said that it prioritizes the safety of its staff and is currently reviewing evacuation procedures following threats to their wellbeing, and the forced shutdown of the oilfield by the armed militia claiming attachment to the local Petroleum Facilities Guard (PFG).

The NOC demanded that the group leave the oil field immediately without pre-condition. It said that it will not take part in negotiations with the militia nor was it willing to compromise following the militia’s decision to revert to violence, insulting language, and theft.

The NOC claimed that in the last few months this militia group have committed a number of crimes including violence against staff, robbery, and interrupting operations and production.

The NOC also voiced its concern over the weakness of the PFG who continue to neglect their responsibility of protecting the oilfields, staff, and the livelihoods of the Libyan people – additionally choosing to cover up crimes committed by the militia group in question.

The NOC called upon the appropriate authorities and local community leaders to act in the national interest and return security to the site.

It added that the legitimate grievances of the south, which deserve and demand a national debate, are being used by a minority of individuals for personal gain that will not benefit the people of Fezzan.

The NOC added that it has been working hard to improve economic conditions in the south. This shutdown will only serve to impair work and local opportunities.

“The presence of this group is a real threat to the field and to the future of our country” said NOC chairman, Mustafa Sanalla. “I want to be clear, this militia has to leave the field immediately. We stand wholeheartedly with the people of the south and understand their concerns.

At NOC we are doing all we can to improve the living conditions of the residents. Their legitimate demands and grievances however have been used by criminals who are only in pursuit of self-interest”.

The NOC reported that the shutdown of the Sharara oilfield will result in a site production loss of 315,000 barrels a day, with an additional loss of 73,000 barrels at El Feel due to its dependence on Sharara for electricity supply.

It also explained that production at the Zawia refinery is also at risk due to its dependence on crude oil supply from Sharara. Zawia refinery will therefore cease producing essential fuels for local consumption unless alternative supply is identified.

The NOC put the combined daily cost to the Libyan economy of what it called “this unnecessary shutdown”, is US$ 32.5 million.

It is unclear to what extent the Sharara field disrupters represent a wide majority or a militant minority, but unsurprising they tell a different narrative to the NOC of low and late payments and benefits.

The declaration of force majeure by the NOC reflects the continued hardline stance taken by its chairman Sanalla against disruptors.

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