Libya oil company says field closed amid political impasse

PTI, Apr 17, 2022, 6:34 PM IST

Representative Image (credit: AFP)

Cairo: Libya’s national oil company on Sunday said it was forced to shut down an oil field amid a political impasse that threatened to drag the North African nation back into armed conflict.

The state-run National Oil Corp. said a group of people entered al-Feel field in the country’s south on Saturday, effectively stopping production. It didn’t say who the people were or whether they were armed.

But tribal leaders in the southern region announced on Saturday the closure of the field in a video statement and demanded the sacking of Mustafa Sanallah, chairman of the National Oil Corp., and the fair distribution of oil revenues to Libya’s three main regions.

They also called for embattled Prime Minister Abdul Hamid Dbeibah to hand over power to the parliament-appointed government of rival Prime Minister Fathi Bashagha.

The corporation announced a force majeure at the field, a legal maneuver that enables a company to get out of its contract obligations because of extraordinary circumstances.

It was not immediately clear how many barrels of production Libya will lose because of the shutdown. The country’s production was at around 1.2 billion barrels a day.

Bashagha was named prime minister in February by the House of Representatives, which has been based in Tobruk.

Dbeibah, who is based in the capital of Tripoli, has refused to step down and insists he will hand over power only to an elected government.

Over the past two months, divisions among Libyan factions have deepened, with militias mobilising — especially in the western region. That has raised fears that fighting could return after more than a year and a half of relative calm.

Sunday’s closure comes as the Russian invasion of Ukraine has rattled markets worldwide, causing crude oil prices to soar above USD106 per barrel.

Last month, an armed group shut down al-Feel and another critical oil field, Sharara, Libya’s largest, before reopening a few days later following negotiations led by tribal leaders.

Libya’s prized light crude has long featured in the North African country’s civil war, with rival militias and foreign powers jostling for control of Africa’s largest oil reserves.

The oil-rich North African country has been wrecked by conflict since the NATO-backed uprising toppled and killed longtime dictator Moammar Gadhafi in 2011.

The country has for years been split between rival administrations in the east and west, each supported by different militias and foreign governments.