PFG threatens to halt crude exports from Libya's Marsa el-Hariga terminal: sources

London — The Petroleum Facilities Guard at Libya's Marsa el-Hariga terminal is threatening to halt crude exports from the eastern port unless its salaries are paid, shipping and trading sources told S&P Global Platts.

PFG guards stationed at the 200,000 b/d export terminal were starting to strike and had refused to let the Suezmax Olympic Fighter enter the loading berth on Jan. 5, sources said.

The eastern PFG is loyal to the self-styled Libyan National Army and its leader, Khalifa Haftar. The PFG has been complaining of a delay in salary payments for several months.

This comes as Libyan oil output surged to over 1.2 million b/d in December, its highest level in more than six years, after the UN-backed Government of National Accord and the LNA agreed a permanent UN-mediated ceasefire in late October.

Some sources are now concerned that the PFG, might take similar action at other eastern ports where it is stationed, such as Ras Lanuf, Es Sider, Brega and Zueitina. But others said the issue is likely to be resolved in a matter of days.

"It is only a matter of salary payment and there is no military action associated," a shipbroker said. "We expect this to resolve quickly as the oil exports are key to the country."

No impact on freight rates was reported in the tanker market. Unipec was reported with a Suezmax cargo from Marsa El Hariga to China, set to load Jan. 18, and had received 11 offers from shipowners in the region.

The Mediterranean-to-Far East run on Suezmaxes remains under pressure amid ample ship supply and subdued cargo activity in the Mediterranean basin, and was assessed at $2.25 million on Jan. 4, according to Platts data.

Fragile deal

A representative at state-owned National Oil Corporation was unavailable for comment.

Under the recently agreed ceasefire, the GNA and the LNA have committed to establish a unity government and hold elections within 18 months.

The LNA continues to control the bulk of Libya's oil infrastructure and talks between the two factions in the past few months have failed to deliver a breakthrough on some of the key issues.

The North African oil producer has been wracked by conflict between the two factions, which almost completely halted its oil output for most of last year.

Libya holds Africa's largest proven reserves of oil, and its main light sweet Es Sider and Sharara export crudes yield a large proportion of gasoline and middle distillates, making them popular with refineries in Europe and China.

Libyan crude production has been on a steep upswing in the past three months after its output had slumped to less than 100,000 b/d as an eight-month blockade temporarily crippled the oil sector.

On Jan. 18 last year, eastern tribes, supported by the LNA, halted exports from five key oil terminals, which reduced the country's crude production to its lowest since the 2011 civil war.

Libya's oil production then slumped to as low as 70,000 b/d from around 1.1 million b/d before the blockade.