Libya’s Oil Disruptions Widen as Two More Fields Halt Output

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Two more oil fields in Libya are being closed after an armed group took over pipelines to both deposits, further disrupting the OPEC nation’s plan to boost crude production.

Credit: Shawn Baldwin/Bloomberg.

El Feel, or Elephant, stopped production, Wessam Al-Messmari, an office manager for the Petroleum Facilities Guard that is protecting the field, said on 27 August by phone. State-run National Oil Corp. declared force majeure at the deposit, according to a person familiar with the situation who asked not to be identified because the information isn’t public.

The Hamada oil field was to gradually stop pumping through 28 August because of the pipeline closing, Arabian Gulf Oil Co. spokesman Omran al-Zwai said on 27 August. Force majeure was also declared on Hamada, he said. Force majeure is a legal clause protecting a party from liability if it can’t fulfill a contract for reasons beyond its control. An armed group closed the pipelines to Hamada and El Feel, according to a person familiar with the situation.

Libya revived its oil production and exports before the recent disruptions. In July, crude production was at a 4-year high and exports were the most in 3 years, according to data compiled by Bloomberg. While the expansion has helped Libya’s oil-dependent economy, the Organization of the Petroleum Exporting Countries (OPEC) is trying to cut global supplies. That effort has been undermined by recovering output at OPEC members Libya and Nigeria.

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