On Saturday, Libya’s Ministry of Oil and Gas said that the continued closure of three oilfields could lead to the declaration of a force majeure. The ministry’s announcement comes a day after the fields were shut in protest against the abduction of a former finance minister.
In a statement, the Ministry voiced its “deep concern about the shutdown of some oilfields, confirming that the consequences and implications of such closures have been highly significant for Libya.” It pointed out that the “aftereffects of such closures are manifold and severe, making it increasingly difficult to enumerate all the potential risks and damages they could cause.”
The Ministry drew attention to the fact that the recent closures could have “profound impacts and hazards of oilfield shutdowns, particularly on Libya’s oil market. A loss of trust in the reliability of Libya’s oil supply to the international market could result in unsold Libyan oil, decreased demand, or the potential permanent loss of Libyan oil importers. This outcome is largely driven by the fear of unstable supplies, our incapability to honour contracts and agreements, and the negative implications for nations involved with Libya in production quotas, who would be significantly affected by this interruption.”
Among the repercussions is the “undermining of the Ministry’s rigorous efforts to convey to the world that Libya maintains substantial stability in oil production, coupled with solid security conditions.”
Such efforts are manifested in broad-ranging meetings with international diplomatic missions and entities via OPEC, and other global organizations. However, convincing certain international actors about Libya’s distinctive status in this domain may become increasingly challenging.
The Ministry also noted that the closures would result in a deficit in supplying gas to power stations. This may lead to a resurgence of severe electricity shortages, load shedding, and disruption in social and economic life.
Alongside the implications of halting and subsequently restarting production, the maintenance and addressing technical issues related to oil extraction, production, and refining equipment pose substantial challenges. These factors demand substantial efforts, extended periods, and high costs, burdening the state’s treasury.
The Oil Ministry has previously warned about these potential consequences and hazards through numerous occasions, and media outlets. Oil Minister, Mohamed Aoun, frequently asserts that “the Libyan people would be the primary victims of a shutdown, more than any other party.”
The Ministry urged all relevant parties to “exercise rationality and to ensure the neutrality of oil and gas production, and export operations from any specialized topics or disagreements. The Ministry steadfastly advocates for the truth, demands rightful claims, and seeks to alleviate instances of injustice and arbitrary practices.”
The Ministry emphasized the imperative to “prioritize the consistent production of oil, its appropriate marketing, and safeguarding it as the lifeblood of the Libyan people.” It stressed that this vital resource “should not be exploited as leverage, much like all other public utilities that serve all Libyans throughout the nation.”
Finally, the Ministry called upon the Petroleum Facilities Guard to “carry out its assigned tasks in terms of securing oilfield sites.”
