Libyan oil production has fallen below 300,000 b/d after workers began fresh strike action at the Sharara field in the west of the country, state-owned National Oil Corporation said Tuesday.
The strike at the 350,000 b/d capacity Sharara field began on Sunday, which had the knock-on effect of loadings of Sharara crude being halted at the export terminal of Zawiya.
Oil minister Adbel Bari el-Arousi and NOC chief Nouri Berruien visited the Sharara field on Monday to meet striking workers in an attempt to resolve the crisis.
“It is regrettable that we return to Tripoli without reaching an agreement with the protesters,” NOC said in a statement.
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“We came to clarify future plans drawn up by the ministry for the region’s development and prosperity, but they refused to meet us for reasons unrelated to the sector,” it said.
“Our production on this day is less than 300,000 b/d because of sit-ins,” it said.
Berruien and Arousi had hoped to address the demands of the protesters, “especially with regard to the provision of adequate protection for workers, and other demands related to increased salaries and bonuses.”
NOC said the oil ministry was trying to move forward with the implementation of plans and programs for the benefit of employees of oil fields and ports.
But, it said, the programs were being delayed by the repeated protests and sit-ins at key oil infrastructure across the country.
Strike action has also broken out again at the Mellitah oil export terminal, meaning all of Libya’s main oil export terminals are again out of action.
SECTOR PARALYSIS
Strikes and protests across Libya and its oil infrastructure paralyzed the industry for most of the summer and autumn, causing oil production to drop at times to as low as 200,000 b/d.
There had been cause for some optimism in mid-September when a deal was struck with workers at Sharara and the nearby Elephant field, which led to their restart and renewed exports from Zawiya and Mellitah.
Zawiya has an export capacity of some 230,000 b/d, making it Libya’s second-biggest export terminal, while Mellitah’s export capacity is 160,000 b/d.
Crude loadings out of the eastern terminals of Es Sider, Ras Lanuf, Marsa el-Hariga and Zueitina also remain suspended.
There have been no exports from these terminals, with a combined capacity of 740,000 b/d, since the end of July.
The closure of the eastern ports is thought to have been ordered by Ibrahim al-Jathran, who fought for control of the eastern oil ports during the 2011 revolution.
Al-Jathran was given command of a government taskforce, the Petroleum Defense Guards, to protect the country’s oil infrastructure in 2012, but he is now demanding that Tripoli allow more political autonomy for the eastern Cyrenaica region.
Analysts believe the Libyan government is almost powerless to enforce the restart of oil exports in the east of the country as this would likely have to be in exchange for granting greater regional political autonomy.
OTHER SUPPLIERS
Barclays said the continuing crisis in Libya served to highlight the dangers posed by a weak state and the lack of a national political consensus following the overthrow of the regime of Moammar Qadhafi in 2011.
“The potential for a near-term resolution that would allow the bulk of Libya’s oil to return to the market on a sustainable basis is remote, in our view,” it said.
The bank said Mediterranean refiners could switch away from Libya to alternate supply sources in the longer term if output and export levels remain volatile.
“One of the immediate near-term implications of this variability in exports has been an increasingly tentative stance from refineries in the region toward buying prompt cargoes,” Barclays said.
“In the long term, the implications suggest a switch to alternate supply sources, but this near-term tentativeness could create periods of staggered orders at the prompt and volatility for local physical crude differentials, in our view.”
Source: platts.com
