Libya's largest oil field shut down by protests

Spanish Market: Crude oil
03/01/24

Libya's largest oil field, the 300,000 b/d El Sharara, has shut down following protests, a source close to the matter told Argus.

"The whole thing is fully offline," the source said.

El Sharara, which is spread over Blocks NC-186 and NC-115 in southwest Libya, is operated by Akakus Oil Operations, a joint venture between Spain's Repsol, TotalEnergies, Austria's OMV, Norway's state-controlled Equinor and Libya's state-owned NOC. The field has a nominal production capacity of around 300,000 b/d but has more recently produced around 270,000 b/d. Leading partner Repsol is planning to start an exploration campaign around El Sharara in April.

The protests are driven by local grievances related to poor service delivery by the central government and lack of infrastructure spending. But the source said the shutdown, which began yesterday, was unlikely to have happened without the consent of bigger power brokers.

"I think the shutdown is more political," the source said. El Sharara has been the site of repeated politically-motivated shutdowns in the past decade. Its production was last affected in July 2023 when the arrest of a key political sparked protests.

Libya's typical crude production of about 1.2mn b/d is equal to around 1pc of global oil demand. The country produced 1.19mn b/d in November, according to Argus estimates.

Around 142,000 b/d of Esharara crude is scheduled to be exported from the Zawia terminal this month on seven cargoes, according to loading programmes. The first tanker is scheduled to be called to berth today, 3 January, according to market sources. The Aframax Minerva Sophia is at the Zawia terminal and is scheduled to leave on 5 January, Vortexa data show. Should the production outage at El Sharara persist, other tankers due to load later this month could be disrupted.

Front-month Ice Brent crude futures hit an intraday high of $76.90/bl at around 13:05 GMT, after opening at $76.06/bl.

By Aydin Calik and Kuganiga Kuganeswaran

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