BENGHAZI, Libya — The eastern-based administration in Libya announced on Monday that the oilfields in the region, which are responsible for nearly all of the country’s oil production, will be shut down. This decision, which will halt both production and exports, comes in the wake of escalating tensions surrounding the leadership of the central bank.
As of now, there has been no official confirmation from either the internationally recognized government in Tripoli or the National Oil Corp, the entity that oversees Libya’s oil resources.
However, Waha Oil Company, a subsidiary of the National Oil Corp, has stated its intention to gradually decrease output. The company also warned of a potential total halt to Libya’s oil production, attributing this to unspecified “protests and pressures.”
Similarly, Sirte Oil Company, another subsidiary, announced plans to reduce output. The company urged authorities to “intervene to maintain production levels”.
It’s important to note that the majority of Libya’s oilfields are located in the east, a region controlled by Khalifa Haftar, the leader of the Libyan National Army.
If production in the east is halted, El Feel, located in southwestern Libya, would be the only operational oilfield. El Feel has a production capacity of 130,000 barrels per day.
According to the Organization of the Petroleum Exporting Countries, citing secondary sources, Libya’s overall oil production was approximately 1.18 million barrels per day in July.
The Benghazi government has not provided a timeline for the potential closure of the oilfields.
While the Tripoli-based Government of National Unity has not confirmed these developments, its leader, Prime Minister Abdulhamid al-Dbeibah, stated that oilfields should not be shut down “under flimsy pretexts.”
Two engineers at Messla and Abu Attifel, who wished to remain anonymous, told Reuters on Monday that production was ongoing and there had been no orders to halt output.
Power Struggle
Libya’s oil revenues have been a source of tension for years in a country that has seen little stability since a 2011 NATO-backed uprising. The country split in 2014 into eastern and western factions, attracting support from Russia and Turkey.
This month, tensions have escalated following attempts by political factions to remove the head of the Central Bank of Libya, Sadiq al-Kabir. This has led to the mobilization of rival armed factions.
The Tripoli-based bank announced on Monday that it had suspended its services both domestically and internationally “due to exceptional disturbance”.
The central bank is the only internationally recognized depository for Libyan oil revenue, which is a crucial source of economic income for the country.
“The Central Bank of Libya hopes that its ongoing efforts in cooperation with all relevant authorities will allow it to resume its normal activity without further delay,” the bank said in a statement.
Last week, the bank temporarily shut down all operations following the kidnapping of a senior bank official. However, operations resumed the next day after the official was released.
Protests have previously disrupted oil output.
Earlier this month, the National Oil Corp declared force majeure at one of the country’s largest oilfields, Sharara, due to protests. Sharara, located in Libya’s southwest, has a production capacity of 300,000 barrels per day. The force majeure is still in effect.
Waha, which operates a joint venture with TotalEnergies and ConocoPhillips, has a production capacity of about 300,000 barrels per day (bpd). This oil is exported through the eastern port of Es Sider.
Waha operates five main fields in the southeast, including Waha, which produces more than 100,000 bpd, as well as Gallo, Al-Fargh, Al-Samah, and Al-Dhahra.
As of now, TotalEnergies and ConocoPhillips have not responded to requests for comment.
Agree with the decision to shut down the oilfields amid ongoing conflict #supportingpeace
Agree – shutting down oilfields is a step towards peace #supportpeacenow