An armed group in Libya has shut a valve on a pipeline from the Al-Sharara oil field, causing a significant drop in production, the National Oil Corporation (NOC) announced on Monday. The Al-Sharara field, located 900 kilometres south of Tripoli, is a major source of crude oil for Libya, an OPEC member with Africa's largest proven oil reserves.
The disruption has affected a pipeline linking the Al-Sharara field to the coastal city of Zawiya, which is home to one of Libya's main export terminals. The NOC did not disclose the identity of the group responsible for the shutdown. This incident is not isolated, as armed groups and protesters frequently target oil fields, pipelines, and export terminals to press political or economic demands.
The closure has caused a pressure buildup within the crude oil pipeline, leading to a significant reduction in production at the Sharara field, according to the NOC. If the shutdown persists, the company may be compelled to declare force majeure, a legal provision that allows suppliers to suspend contractual obligations due to circumstances beyond their control.
A declaration of force majeure would directly reduce state revenues, particularly at a time when global oil prices are rising. The NOC also warned that the Zawiya refinery, located about 45 kilometres west of the capital Tripoli, could be forced to shut down if the disruption continues. This would further exacerbate the economic challenges facing the country.
Libya has struggled with violence and instability since the overthrow of Muammar Gaddafi in 2011. The country remains divided between the UN-recognised government in Tripoli, led by Prime Minister Abdulhamid Dbeibah, and a rival administration in the east, backed by military strongman Khalifa Haftar.
The shutdown of the pipeline has raised concerns about the impact on Libya's oil production and the broader economy. The country's energy sector is a significant contributor to its GDP, and disruptions to production can have far-reaching consequences. The NOC is working to resolve the issue and restore production as soon as possible.
The incident highlights the ongoing challenges facing Libya's oil sector, including the threat of attacks on infrastructure and the impact of political instability on production. The international community is closely monitoring the situation, and efforts are underway to support a peaceful resolution to the crisis and restore stability to the region.
Key points
- The shutdown of the pipeline has caused a significant drop in oil production from the Al-Sharara field.
- The incident has raised concerns about the impact on Libya's economy and the country's ability to meet its oil production targets.
- The NOC is working to resolve the issue and restore production as soon as possible.
