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Libya’s Sharara oilfield faces threats of another shutdown

In Libya, members of Petroleum Facilities Guard (PFG) threatened to halt oil exports from Sharara, the country’s largest oil field with a current production capacity of 280,000 barrels per day. According to information provided by the argus media on 8 April, the armed militia explained this decision by not paying salaries related to the provision of security services on several fields of the oil crescent.

In February 2021, an oil tanker was forced to leave The Hariga export terminal in Libya without oil, after PFG members prevented the ship from loading crude, again as part of a late-wage strike.

It should be noted that the threats of disruption of black gold exports by the PFG due to wages or other unpaid allowances are not new in the Libyan oil industry.

El Sharara is operated by Akakus Oil, a joint venture between NOC, Spain’s Repsol, Austria’s OMV, Norway’s Equinor and France’s Total. So far, neither the NOC nor its partners operating the field have yet reacted to the launch of the armed group’s ultimatum regarding their remuneration.

Libya currently produces more than 1.3 million barrels per day and could reach pre-war levels of 1.6 million barrels per day. But the possibility of the activities suspended on the Sharara field, which accounts for about 1/3 of the country’s total production, could upset the country’s encouraging forecasts. This, especially since this field is considered a joker in the forecast of world oil prices.

Moreover, Libya, which was suffering from the lack of funding to modernize the infrastructure of the energy sector, is no longer in this impasse, because Mohamed Aoun, the Libyan Oil Minister, said in March 2021 that there was now enough funds to achieve this goal. This was made possible by the nascent political stability following the recent establishment of an interim government of national unity.

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