Libya's NOC ready to lift force majeure from Es Sider to allow tanker loading

London — Libya's National Oil Corporation says it is ready to lift the force majeure from the port of Es Sider to allow a tanker to load crude oil from storage, but it has urged foreign mercenaries and armed groups to leave the oil terminal immediately.

NOC said it is in urgent need to resume production "as soon as possible to stop the damage" to the country's oil infrastructure and "protect vital assets from further deterioration and collapse."

The Suezmax tanker Delta Ocean was seen heading towards Es Sider to load a crude cargo, but the tanker has slowed its speed as a production restart deal has still to be agreed. The tanker is expected to reach Es Sider by July 9, according to data from S&P Global Platts cFlow trade flow software.

The restart of a bulk of Libya's crude output still hangs in the balance as the country remains embroiled in a civil conflict.

NOC is in talks with regional countries and the Government of National Accord under the supervision of the UN and the US to restart its oil output, but negotiations haven't been very smooth, according to sources.

Force majeure declarations on crude loadings at the Marsa el-Hariga, Brega, Es Sider, Ras Lanuf and Zueitina terminals remain in place, as the ports are still being blockaded by the guards.

Libya is currently pumping around 100,000 b/d, according to Platts estimates. Prior to the blockade, the OPEC member was producing more than 1.10 million b/d.

State-owned NOC warned July 7 that the country's crude output could halve in the coming years, unless the ongoing blockade on its eastern terminals is lifted soon.

Permanent damage

NOC Chairman Mustafa Sanalla warned of the "permanent" damage to the country's oil sector from both a budgetary and technical perspective, which will have severe repercussions on its future output capacity.

Sanalla cautioned that Libya's crude production could slump to 650,000 b/d in 2022, "in the absence of an immediate restart of oil production and because of the state's failure to provide the requested budgets to address the many challenges resulting from the blockade."

The conflict between the UN-backed Government of National Accord and the self-styled Libyan National Army has escalated in recent months, with Libya's oil and natural gas facilities caught up in the dispute.

On Jan. 18, eastern tribes -- supported by the LNA -- halted crude exports from five of Libya's key oil terminals, which drastically reduced the country's crude production.

The oil blockade cost the country more than $6.5 billion in revenues from lost production, and NOC is also under serious budgetary constraints, which would impact the maintenance of its oil infrastructure.

NOC also recently called out foreign powers, singling out Russian mercenaries for meddling in the country's oil sector, accusing them of preventing the North African producer from restarting production.

The GNA is backed by Turkey and Qatar, while the LNA is supported by Russia, Egypt, the UAE and Saudi Arabia.

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