Libya Loses $80 Million due to Oil Fields Shutdown


Libya National Oil Corporation (NOC) stated that the closure of crude valves from the El-Sharara and El-Feel oilfields led to the loss of 660,000 barrels of oil, worth over $80 million dollars.

On Tuesday, the Libya NOC announced that an armed group shut down two crucial oil fields, causing the country’s daily production of oil to drop. Before the shutdown, Libya’s production of oil was at around 1.2 million bpd.

NOC Chairman, Mustafa Sanalla announced a force majeure, a legal manoeuvre that frees the company from its obligations, given the extraordinary circumstances.

Sanalla said the Libya NOC has urged public prosecutors “to take deterrent measures” and reveal “the planners, executors, and the beneficiaries” of the shutdown. “The same militia had disrupted oil production at both fields in 2014 and 2016,” he added.

An official in Libya said the group that closed the fields was from the mountainous town of Zintan, around 136 kilometers (over 84 miles) southwest of Tripoli. Tribal leaders in the area were negotiating with the militia leaders to allow production to resume, said the official, who spoke on condition of anonymity.

The shutdown came as the Russian invasion of Ukraine has shaken global markets, causing crude oil prices to soar above $115 per barrel. Libya has the ninth-largest known oil reserves in the world, and the biggest oil reserves in Africa.

The dizzying developments have come amid a mounting standoff between two rival governments, which threaten to again drag the country into chaotic infighting.