The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
Libya’s crude output dropped 11 percent as clashes among rival armed groups over the last 11 days led to the closing of some of the OPEC nation’s biggest oil export terminals, forcing a number of fields to halt production.
Output fell by about 80,000 barrels a day to 620, 000 barrels since fighting among armed groups broke out on March 3, according to a person familiar with the matter, who asked not to be identified because the person doesn’t have permission to speak to media. Es Sider, the country’s biggest oil port, and Ras Lanuf, its third-largest, remain closed, according to the person. Crude production halted at Waha Oil Co., which pumps crude to Es Sider. Waha is a joint venture between the state oil company National Oil Corp., Hess Corp., Marathon Oil Corp. and ConocoPhillips.
The Petroleum Facilities Guard, a United Nations-backed force, last week said they took control of oil installations at Es Sider and Ras Lanuf, following their capture by a militia group called the Benghazi Defense Brigades earlier this month. The ports had previously been controlled by eastern-based military commander Khalifa Haftar. The clashes dealt a blow to recent gains in the North African nation’s oil output. Exports had resumed from Es Sider and other facilities that were previously shut amid fighting in the country, which has Africa’s largest crude reserves. Output in February was about 700,000 barrels a day, almost double the level of the previous year, data compiled by Bloomberg show.
Libyan authorities may declare force majeure at ports if clashes escalate in the area, the person said. Force majeure is a legal status protecting a party from liability if it can’t fulfill a contract for reasons beyond its control. The status was imposed on the two ports in December 2014 when armed groups attacked the area, damaging storage tanks and infrastructure. It was lifted about two years later.
Air strikes at the two ports have continued for the last two nights and resulted in some damage to parts of the maintenance building at Es Sider and parts of the petrochemicals factory at Ras Lanuf, Idries Bu Khamada, head of the Petroleum Facilities Guard, said by phone Monday. The damage to Es Sider shouldn’t prevent exports, he said.